According to the official information of the National Bank of Ukraine, in 2006, as in previous years,  the development of the monetary market was greatly influenced by changes of balance of payments indicators via relative changes of demand and supply in foreign exchange segment of the market. However, if in previous years it encouraged accelerated increase of money supply (since 1999 increase rates of money supply exceeded 40% per year), then in 2006 the negative foreign trade balance, which was not fully compensated by capital flow, caused slow down of monetary aggregates dynamics. It promoted balancing of commodity flows and amount of money in circulation.

In 2006 the monetary policy was accomplished adequately to macroeconomic situation. At the year begin under keen demand for foreign exchange it had a stabilizing character. Starting since 2d Quarter of  2006 the National Bank of Ukraine began to conduct more active monetary policy under positive changes in the macroeconomic field and stabilization of the foreign exchange market.

Under these circumstances, the increase of monetary base in 2006 by 17.5%  up to 97.2 UAH billion (last year - by 53.9%), as well as the increase of money supply by 34.5% (last year - by 49.3%) can not attest to restricting directivity of the monetary policy. On the contrary, via monetary instruments the National Bank of Ukraine provided for the money supply adequately to the increasing demand and promoted maintaining of the monetary market equilibrium and strengthening of positive tendencies in both monetary field and in the real sector of economy.

Comparatively high index of consumer prices in 2006 (111.6 %), comparing to 110.3% in previous year, was effected  mostly by the increase of administratively regulated tariffs for services and had no significant monetary ground.

Under slow down of monetary base increase the National Bank of Ukraine used mechanism of refinancing of banks to maintain the banking system liquidity. In 2006 the total volume of refinancing transactions of banks exceeded 10 UAH billion.

Besides the adjustment of reserve requirements, the National Bank of Ukraine used other monetary instruments to provide appropriate level of money supply which contributed for maintaining the monetary market equilibrium and strengthening of positive tendencies in both monetary field and in the real sector of economy.

To maintain the banking system liquidity, the National Bank of Ukraine effected in 2006 the refinancing of banks to the general amount of 8331.8 UAH million, including 5572.6 UAH million of the overnight credits, 1358 UAH million - direct repo-transactions, 1007.5 UAH million - loans, granted via tender, 378.8  - swap transactions, 14.85 UAH million - credits under security of the right of ownership on bank deposit.

Average-weighed rate on all refinancing instruments in 2006 amounted to 11.53 %.

Transactions on fund mobilization in 2006 amounted to 6760 UAH million.

 The money supply increase was restrained because of the decrease of growth rates for money supply outside banks. In 2006 it increased by only 24.5 % and reached  75 UAH billion. It encouraged continuation of positive tendency of improving of money supply composition - the specific weight of cash flow in money supply has decreased since the year begin from 31 % to 28.7 %.

In 2006 there was continued tendency of increasing banks reserves: total  volume of deposits increased  since the year begin - by 38.8 % up to 174 UAH billion. At this, the growth rates for deposits of households (45.8% since the year begin) passed ahead of growth rates for deposits of legal entities (30.1%).

The specific weight of long-term deposits in total volume of deposits increased in 2006 from 38.5% up to 43.7%.

The volume of credit deposits increased since the year begin by 71% up to 245.3 UAH billion (in December - by 5.9%).  The increase of credit deposits was the largest since revival of the economic growth.  Banks credit deposits to natural persons grew by higher rates (by 2.3 time) than credits to legal entities (by 51.8%).

The specific weight of long-term credits in total volume of credits increased in 2006 from 60.3% up to 63.9%.

The average weighted rate on credits in national currency had decreased in 2006 16.4% to 15.1%.  Integral rate on credits decreased from 14.6% to 13.7%.

Average weighted rate on deposits in national currency decreased in 2006 from  8.1% to 7.9%, and in foreign exchange - from 6.9% to 6.1%.  Integral rate on deposits decreased from 7.7% to 7.2%.