ICU Research: Liquidity recovers slightly
July 19, 2017
Last Friday and this Monday, liquidity recovered slightly but remained below UAH100bn, and yesterday it started at UAH99.46bn, up UAH0.64bn from the day before, as a result of the positive impact of non-monetary operations and NBU monetary operations. For the first time over the last two weeks, the impact of cash was positive, and with inflows from the Treasury and other operations, with the positive impact of non-monetary operations of UAH0.33bn. The NBU provided via monetary operations, most likely an FX purchase of UAH0.31bn.
This Monday, banks continued to accumulate funds at banks' accounts at the NBU, probably in anticipation of large outflows soon and as a result of low inflows from the Treasury (as the positive balance of Treasury operations amounted to UAH0.04bn this Monday). Banks' correspondent accounts with the NBU rose UAH2.02bn to UAH46.67bn while total CDs outstanding slid UAH1.38bn to UAH52.78bn. The decline in CDs outstanding was in 14-day CDs partly while the amount of ON CDs was slightly up, an increase most likely in anticipation of outflows very soon.
Investment implications: The slight recovery in liquidity was mostly due to an insufficient but positive impact of non-monetary operations. Yesterday, the Treasury paid about UAH757.57m in VAT refunds, similar to the amount paid earlier this month. These payments could support liquidity today, but for a short period of time, as tomorrow month-end tax payments begin. Thus, liquidity could remain volatile at around UAH100bn with a chance to increase with additional VAT refunds this month.
Company — NBU
Full nameThe National Bank of Ukraine