At the beginning of October 2008 there was observed strengthening of strain in the Ukrainian financial market, caused by negative tendencies in the development of the world economy and deliberately provoked discredit of some banks` financial position (which negatively effected the trust of households towards banking system in general). The above-mentioned caused some withdrawal of funds from bank clients` deposit accounts and at the end, decrease of the banking system monetary liquidity.

So, natural persons deposits decreased in October by 4.1% o 196.0 UAH billion (since the year begin they increased by 19.2%). Legal persons` deposits decreased by 0.6%  to 134.9 UAH billion (since the year begin they increased  by 16.6%).

The total deposits decreased in October by 2.7% (since the year beginning they increased by 18.1%) up to 330.9 UAH billion.

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Funds, drawn out from deposits were accumulated as cash money. In October the volume of cash flow outside banks increased by 9.5 % to 146.3 UAH billion (by 31.6% increase since the year beginning).  At this, its specific weight in money supply composition has increased in October to 30.5%  comparing to 28.0% at the beginning of the month.

At this, there continued the tendency of slow down of money supply growth. The money supply  increased in October by only 0.3%  (since the year begin - by 20.9%)  up to 479 UAH billion.  In annual measurement (over corresponding month of the previous year)  this indicator decreased in October to 35.2% comparing to 37.2% in September).

The monetary base has increased in October by 1.5% (since the year beginning  by 22.2%)  up to 173.4 UAH billion.  In annual measurement (over corresponding month of previous year) the growth rates of monetary base slowed down in  October to 33.1% comparing to 33.8% in September.

 To stabilize the monetary market of Ukraine, the National Bank of Ukraine has taken extra measures as to banks activities which are represented at the Resolution of the Board of the National Bank of Ukraine No. 319 of October 11, 2008 (as amended).  After approval of the above resolution, the monetary market of Ukraine has began its gradual stabilization. So, by the end of October the flow of natural persons term deposits has been already of the stable rising character. For the period since October 23 till November 1, their volume has increased by 7.5 UAH billion.

There also stopped decrease of the banking system liquidity, which was characteristic for the most part of October. During last week of the month (except for some decrease in the last day of October) the volume of banks correspondent accounts has stabilized and amounted to 14-16 UAH billion). In general, the volume of banks correspondent accounts decreased in October by 38.5% (since the year beginning - by 21.9%) up to 14.9 UAH billion).

In October the flow of banks correspondent accounts was greatly influenced by the NBU transactions on foreign exchange sale in the interbank market, which  was only partially compensated by 28% decrease of government funds in national currency on accounts with the National Bank of Ukraine.

 To maintain the banking system liquidity, the National Bank of Ukraine effected in October transactions on refinancing of banks to the total amount of 29230.16 UAH million. Since the year begin they amounted to 93308.26 UAH million.

At the same time to improve redistribution of provisionally spare money between banks, the National Bank of Ukraine continued in October effecting of transactions on mobilization of banks` funds. In October the mobilization transactions amounted to 6540 UAH million (since the year begin - they equaled  53015.25 UAH million).

The average weighted interest rate on refinancing transactions amounted in January - October 2008 to 15.3% annual, including 15.6% of overnight credits, 15.9% of credits granted in tenders on maintaining banks liquidity, 15.3% of transactions of direct repo with government T-bills of Ukraine, 14.9% of swap transactions, 13.8% of other short-term credits.

In October there increased the average weighted rate on credits in both national currency and foreign exchange. So,  the average weighted rate on credits in national currency increased from 16.8% to 19.1%; in foreign exchange - from 12.7% to 12.9%. The integral interest rate on credits increased from 15.2% to 17.1%

 The average weighted rate on deposits in national currency increased in October from 9.8% to 10.4%, in foreign exchange - from 6.4% to 7.4%.  The integral interest rate on deposits increased from 8.8% up to 9.5%.

The volume of credit deposits increased in October by 9.3% (since the year begin - by 44.9%) up to 618.4 UAH billion. Credits granted to legal persons increased in September by 7.9% (since the year begin - by 42.3%) up to  386.3 UAH billion). Credits granted to natural persons increased by 11.7% in October and by 49.3% since the year beginning up to 232 UAH billion. 

The volume of required reserves, formed by banks in October amounted to 12712 UAH million. At this,  in compliance with the  the Resolution of the Board of the National Bank of Ukraine No. 319 of October 11, 2008 (as amended) "On extra measures as to banks activities", banks are authorized to exercise the required  reservation of funds,  discounting the cash balance in national currency and government T-bills, the maturity whereof is due in reporting calendar year.