The war destroyed foreign currency lending in Ukraine.

The Russian full-scale invasion has practically destroyed the demand for foreign currency loans, contributing to the reorientation to lending in the national currency, which is a good indicator for the economy, said the top manager of the NBU, Pervin Dadashova.

She noted that previously, the primary motive for foreign currency lending was lower interest rates for such loans, which led to problems in the absence of real needs and income in foreign currency. Dadashova noted that the loan portfolio has recently stabilized and returned to slight growth. Now, banks face the task of compensating for their losses incurred during the war, which amount, according to various metrics, to about 15%.

“The loan portfolio quality is normal and even better than before the war. That is, banks are not exposed to as much credit risk as they were a few months ago,” the financial expert emphasized.

She clarified that so far, the small growth observed in the loan portfolio is related mainly to growth within the framework of state support programs.