REUTERS
As expected, businesses' sentiment has worsened.
The National Bank of Ukraine (NBU) has reported that the country's economy and the banking system in particular have quite smoothly passed the first month of the nationwide quarantine introduced to combat the novel coronavirus.
The amount of funds in hryvnias on households' bank accounts had increased by 4% since the beginning of March, to UAH 341.4 billion (US$12.63 billion) as of April 10, and that of foreign currency had decreased slightly, by 2%, to US$9.8 billion, the NBU said on Facebook on April 14.
The NBU emphasized that banks' hryvnia liquidity exceeds UAH 200 billion (US$7.4 billion), and there is also more than UAH 30 billion (US$1.11 billion) at their cash departments. Foreign currency liquidity alone amounts to US$7.9 billion, as it was a month ago.
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About 70-75% of bank branches and more than 95% of ATMs continue operating normally, and all services are available online.
Also, the NBU noted that banks continue to issue loans: lending to households is still growing at a rate of 27% year-on-year; net loans in hryvnias issued to businesses have expanded by 3.6%, while the volume of foreign currency loans has been declining.
The regulator says banks did not significantly change credit limits, and facts when limits were lowered by individual banks concern non-working customers (for individuals) and the depletion of funds (for the corporate sector).
It also reports that banks continue credit vacations for borrowers during the quarantine period, and nearly three dozen banks have publicly announced the possibility of restructuring loans.
Speaking about the economic situation, the NBU noted that businesses' sentiment worsened as expected, because entrepreneurs project a decrease in sales and production.
The situation in the labor market is also tense, but most enterprises are trying not to lay off employees.
At the same time, prices are still rising slowly – inflation in March was 2.3% in annual terms, and a rush on the forex market quickly subsided.
"We went through the first month of the quarantine with a margin of safety and confidence. So far so good. However, to reduce the negative impact of the coronavirus on the economy and citizens in future, we definitely need the support of the International Monetary Fund and international donors," it said.