Finance

Thursday, July 29

The EBRD will extend a €100 million loan to Oschadbank, money that can be exchanged for shares in the state-owned bank. The government approved the loan yesterday as part of the strategy to ultimately privatize Ukraine’s state-owned banks.

The hryvnia has crossed the symbolic barrier of 27 to dollar, strengthening to today’s official level of 26.86. To prevent the hryvnia from overvaluing, the central bank has bought $2 billion from the population this year, Bohdan Danylyshyn, chairman of the Nati...

The average nominal salary of Ukrainians last month was 24% higher than one year earlier, the State Statistics Service reports. This June salary — $533 a month – is 2.4 times greater than the minimum wage of UAH 6,000 [$223]. Ukraine’s yearly inflation in May was 9.5%. Partly cancell...

Wednesday, July 28

By the end of this year, the government plans to sell all its shares in Centrenergo, the state-owned energy company, the State Property Fund announced Monday. A rolling series of auctions will commence on August 2. The state owns 78% of Centrenergo. The Fund has reported that the sale might net $14 million. The Fund...

Of Ukraine’s 3,343 state owned companies, only 28% made a profit last year, according to research conducted by Ukrainska Pravda, (Economy Ministry data). Last year, only 43% of Ukraine’s state companies – 1,458 – were functioning. Ukraine’s state companies lost almost $2 bill...

The Finance Ministry auctioned the equivalent of $116 million in hryvnia and dollar bonds yesterday, less the half the amount sold in the previous week, the Ministry reports on Facebook. The offering of a 1-year dollar bond, at 3.7%, accounted for 56% of all sales, or $65 million. Similarly, the sale of a 1-year hryvnia bond, at 11.15%, accounted for ...

Tuesday, July 27

Concorde Capital’s Dmytro Khoroshun writes: “Metinvest’s monthly EBITDA will likely amount to at least $400-500 mln in 2Q21 and in 3Q21 because of strong steel and iron ore prices. Steel prices will likely decrease by the year’s end, but produc...

Ukraine’s GDP probably grew by 6% during the second quarter, compared to April-June of last year, predicts the Economy Ministry. This growth will cancel out the Q1 contraction, making 1.9% growth for the first half, the Ministry predicts. With this growth the M...

Friday, July 23

Ukraine is placing $500 million in Eurobonds maturing in 2029 at 6.3%, (Interfax-Ukraine). The initial yield guidance was 6.625%. The transaction was oversubscribed thrice. In May, Ukraine placed $1.25 billion in Eurobonds maturing in 2029 at 6.876%. BNP Paribas and Gold...

Seeking to contain Europe’s second highest inflation rate, Ukraine’s central bank unexpectedly raised its prime rate by 50 basis points yesterday, to 8%. A second hike, to 8.5%, is likely this fall, warned the National Bank of Ukraine. The Bank warned: “The NBU’s forecast envisages that the key policy rate will be raised further, to 8.5%, and maintaine...

The central bank now predicts that Ukraine’s inflation will peak this fall at 11%, then recede to 9.6% for 2021. Until yesterday, the official prediction of the National Bank of Ukraine inflation at year end would be 8%. The Bank blamed “temporary increases in global food and energy prices,” strong consumer dema...

Looking ahead, the Bank forecasts: “After peaking in the fall of this year, inflation will begin to slow as the new harvest arrives and global energy prices adjust.” In the second half of 2022, inflation will slow to 5%, the Bank has p...

Politics also may have influenced the interest rate hike. In one year on the job, Kyrylo Shevchenko, the Governor of the National Bank of Ukraine, has presided over the departure of one third of top officials at the bank. On Tuesday, the Financial Times repo...

Thursday, July 22

The Prime Minister Shmygal told reporters last week that Russia-Ukraine trade dropped by nearly 84% over the last six years. Two-way trade dropped from $37 billion in 2014 to $7 billion last year. “Trade turnover between Russia and Ukraine is gradually declining,” he said at a joint press conference with visiting European C...

Wednesday, July 21

Yesterday the Finance Ministry sold $285 million worth of bonds, 21% less than the previous week. The sale covered half of UAH 15.6 billion in principal repayments due today. Interest rates on all six bonds were unchanged from the previous week, the Ministry reported. They ranged from 10.99% for 1...

Ukraine’s central bank is likely to keep its key interest rate unchanged at 7.5% tomorrow, expecting inflation will slow down in coming months, indicates a Reuters poll of analysts. At the meeting of the monetary policy board of the National Bank of Ukraine, ten of 14 Ukrainian analysts for...

Tuesday, July 20

Fighting a slow drain of workers to Poland and Germany , Ukrzaliznytsia is raising salaries this month by 10% for all employees earning up to $1,000 a month.

On one case of a reverse flow, 80,470 international students are attending Ukrainian universities, bringing $600 million a year into the country, said Ukraine’s Educations Ministry. Almost one quarter come from India. International students studying medicine in Ukraine pay $4,000-$4,500 in tuition per year, about one third the amount they would...

Ukraine’s GDP grew by 6% yoy in the second quarter, the Economy Ministry reported yesterday. The increase comes after five straight quarters of decline due to the coronavirus pandemic. In a Reuters poll, economists predicted an 8% yoy increase. The Min...

Monday, July 19

With Ukraine’s imports and exports of goods up by 26%, the trade deficit has dwindled to $1.1 billion for the first five months of this year. May 2021 saw a trade surplus of $261 million, the State Statistics Service reported Friday. At the start of 2021, some economists forecast a goods trade deficit...

In another sign of economic recovery, the government received 6% more tax revenues in the first half of the year than targeted, Prime Minister Shmygal announced to the Rada on Friday. The government received an extra $1.3 billion in tax revenue.

With the summer slipping away, the realistic scenario for Ukraine’s relationship with the IMF might be to convert Ukraine’s frozen Stand-By Arrangement into an Extended Fund Facility , wrote Timothy Ash, a veteran observer of Ukraine’s IMF deals. The IMF may “look to roll the monies into a new EFF to be negotiated towards year end – maybe that should now be the focus,” Ash w...

Friday, July 16

In other legislative news, the Rada also approved 3-year parameters for the national budget. The Budget forecasts for the next three years: the GDP will rise by 5% a year, unemployment will fall from 9.2% to 7.8%, and the dollar exchange rate will weaken from 27.3 today to 29.2 in 2024.

The IMF has welcomed the Rada’s recent approvals of judicial reform bills, but “more progress is needed in other sectors,” said Gerry Rice, the IMF spokesman at the regular briefing in Washington. “Discussions with the authorities will continue.”

In Kyiv, Yuriy Geletiy, the Deputy Governor of the National Bank of Ukraine, predicted in an interview with Interfax-Ukraine: “This year we can get a tranche.” He said an IMF tranche would trigger the release of €600 million from the EU and $350 million from the World Bank.”...

Thursday, July 15

Yesterday the Rada overwhelmingly approved the acceptance of a €340 million low interest credit line from the European Investment Bank to restore social and transport infrastructure in regions affected by the war in southeast Ukraine. The funds will also be directed to regions affected by an influx of internal refugees from the war-affected areas.

From next Tuesday, the central bank will allow businesses to buy up to €100,000 a day without providing supporting documents. The move is part of multi-year liberalization of for foreign exchange laws. “We have decided to abolish this requirement gradually,” Yuriy Geletiy, deputy gover...

Wednesday, July 14

Ukraine’s central bank yesterday appointed Serhiy Nikolaychuk, to be the new Deputy Governor responsible for monetary policy. Nikolaychuk has worked for 15 years at the National Bank of Ukraine, rising to head the monetary policy department. In 2019-2020, he was the Deputy of then Economy Minister, Timofey Milovanov. For the...

“This is good news for our international partners, ” Viktor Kozyuk, a member of the central bank’s council, told Bloomberg. “Serhiy has experience of cooperating with them. They’ll speak the same macroeconomic language.” Nikolaychuk succceeds Dmytro S...

Timothy Ash wrote that with the Nikolaychuk appointment by President Zelenskiy is sending “a clear signal to the IMF that he wants to put the NBU back on a reform path , or do whatever it takes to make peace with the IMF this side of a Biden meeting.”

As the Finance Minister’s visit to Washington continues into its second week, Minister Serhiy Marchenko said he is having “very good” talks with the IMF and the US Treasury Department. “We will be able to fulfill all our commitments under the IMF program and be able to continue...

The Finance Ministry has tripled proceeds from its weekly bond auction, netting the equivalent of $361 million yesterday. This figure compares with $113 raised million last week, the Ministry reports on Facebook. Yields were virtually unchanged for the six bonds offered. The most popular hryvnia bond, the 2-year, offered...

Monday, July 12

Ukraine should receive $2.7 billion from the IMF by late August, in time for $3 billion in debt payments due in September, Vladislav Rashkovan, Ukraine’s Alternate Executive Director to the IMF, writes on Facebook from Washington. The funds will be Ukraine’s portion of a $650 billion distribution of IMF money approved Thu...

Separately, Ukraine’s Finance Minister Serhiy Marchenko reported Friday that Ukraine and the IMF have reached a compromise on anti-corruption and corporate governance reforms. Last week, Marchenko had a series of meeting with IMF officials in Washington to try to restart the IMF lending program that stalled one year ago. The Finance Ministry statement concluded: “The partie...

During the first half of this year, Ukrainians sold a net $1.25 billion in dollars to banks, Bohdan Danylyshyn, Chairman of the National Bank of Ukraine Council writes on Facebook. Citing “a steady predominance of foreign currency supply over demand,” he said that net foreign currency sales t...

Ukrzaliznytsia’s $300 million Eurobond at 7.875% is getting poor reviews. Dragon Capital, co-organizer with JP Morgan, reports that 94% of the investors were from large asset management funds and 91% were from Europe and the UK.

Concorde Capital’s Alexander Paraschiy wrote: “The placement rate implies a spread to the sovereign curve of 247 bps, which looks too high for a quasi-sovereign issuer. Two years ago, Ukrainian Railways issued a new bond with a 155 spread to the ...

Last month the rate of Inflation slowed, falling to a 0.2% rise over May , reports the State Statistics Service. However, compared with June 2019, prices were up by 9.5%. The main driver is a 175% yoy increase in the price of natural gas. Prices also rose for two products ...

Friday, July 9

Ukrzaliznytsia has placed 5-year Eurobonds worth $300 million at 7.875% per annum, a banking source tells Interfax-Ukraine. This would be substantially higher than the 7% range analysts had expected. J.P. Morgan and Dragon Capital were advisors on the issue. Fitch Ratings assigned t...

Surging purchases of Ukrainian government bonds by international investors, high prices of Ukraine’s export commodities, and central bank dollar purchases contributed to Ukraine’s foreign reserves rising by almost 2% in June, to $28.4 billion. International investor share of ...

Concorde Capital’s Evgeniya Akhtyrko wrote: “An incredibly favorable situation at Ukraine’s ForEx market prompted the NBU to renew the purchase of foreign currency. An additional currency inflow at the market was generated by the purchase of UA...

Used car imports surged 40% in the first half of this year, compared to January-June of last year, reports Ukravtoprom. Of the 195,500 used cars imported, the top three brands were: Volkswagen, Ford and Renault. Due to a lowering of import duties and reduced b...

Bogdan Motors, one of Ukraine’s last major vehicle makers, was declared bankrupt by the Commercial Court of Dnipro region , according to a ruling published Tuesday. With plants in Lutsk and Cherkasy, Bogdan was famous for its yellow minibuses. With debts mounting to $245 million, the court ordered liquidation.

Thursday, July 8

Finance Minister Serhiy Marchenko is in Washington this week to negotiate a $700 million tranche with the IMF, Economy Minister Oleksiy Lyubchenko told reporters yesterday on the sidelines of the Ukraine 30 Forum. “Institutional changes, direct actions of the government” demanded by the IMF have been ful...

Wednesday, July 7

Three years in the making, an agreement signed last week in Beijing for China to finance and build bridges, highways and railways in Ukraine represents a big step up for China’s commitment to Ukraine, Chinese analysts tell the South China Morning Post. “Ukraine can only embrace China more since both the EU and NATO have not shown much interest in Ukraine joining for now,” said Li Lifan, a senior fe...

“Ukraine is trying to find a balance between China, Russia and the United States,” Yang Jin, an expert on Russian affairs from the Chinese Academy of Social Sciences, told the Hong Kong daily. “So now it’s seeking closer ties with China and that attracts attention from the US.” In t...

Ukraine’s seaports handled 16.7% less cargo in the first half of this year than during the same period last year. Of the 66 million tons, ore accounted for 19 million tons – down 16% — and grain was 17 million tons – down 27.6%. Overall export cargo was 50.4 million tons – down 16.4%. Despite the volume dro...

Ukraine’s GDP may grow by 8% in the second quarter, a partial rebound from last year’s disastrous Q2 when the economy contracted by 11% . A Reuters poll of analysts indicated yesterday that the economy will grow by 3.7% this year, largely making up for last year’s contraction of 4%. During the first quarter of this year, Ukraine’s eco...

The Finance Ministry yesterday sold the equivalent of $113 million of hryvnia bonds in an auction of five different tenures. The sale raised 24% more than last week’s auction. Yields were little changed and ranged from 10.99% for 1-year bonds to 12.59% for 5-year bonds.

Yesterday Ukrzaliznytsia started investor calls for the placement of new 5-year Eurobonds to raise $300 million, Interfax-Ukraine has reported. Last month, S&P changed the outlook for Ukrzaliznytsia’s credit rating from negative to positive in connection with a debt rescheduling deal with Sberbank. With the economic downturn caused by the...