ICU Research: Record-high liquidity

February 10, 2020
Last week, total banking-sector liquidity set a new record at UAH246.8bn. This was due to a large hard-currency purchase by the NBU and an increase in budget expenditures. But this week, liquidity can decline if depending on how much FX exporters sell for tax payments.

Last week, most components of liquidity made a positive impact. To restrain a new wave of appreciation, the NBU actively purchased hard currency, at US$317.5m, which added UAH7.8bn to liquidity. Treasury operations also provided liquidity of UAH4.9bn. Only reserves exchange in cash had a negative impact at UAH3.1bn.

In total last week, liquidity received UAH10.4bn of inflows and by Thursday reached a new record high of UAH246.8bn.

ICU view: The total amount of banking-sector liquidity can slid this week, as exporters may use local-currency funds they accumulated earlier for quarterly tax payments. However, if they start selling FX for tax payments, the NBU will be forced to buy an extra supply, which will add new funds to liquidity, and new records will be seen.
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