According to a National Bank report published this week, Ukraine’s financial sector is showing growth. According to the results of last year, the net profit of Ukrainian banks amounted to 83.2 billion hryvnias. This is almost four times more than it was in 2022. In addition, the level of inflation decreased, which made it possible to lower interest rates on loans and move to the gradual lifting of restrictions on the foreign exchange market.
Stabilization of the hryvnia exchange rate
Judging by the indicators published by the National Bank, the monetary policy of the institution shows quite optimistic results. Confidence in the national currency is growing, and the number of hryvnia deposits (+37%) has set a record for the last decade.
The inflation rate for the year decreased from 26.6% to 5.1%. In April 2024, it generally exceeded all expectations, falling to 3.2%. The difference between the official and market exchange rates of the hryvnia
The country’s international reserves, which are a kind of safety cushion, increased by 42% to 40.5 billion US dollars in 2023. By May 1, 2024, this indicator will increase even more – to 42.4 billion dollars.
And although during the last week there were noticeable fluctuations on the foreign exchange market, and the dollar crossed the 40 hryvnias mark, this phenomenon is temporary. It is connected with the reduction of the rate of the National Bank and psychological sentiments in the market. The inflow of foreign exchange earnings from the export of Ukrainian agricultural products in the summer usually contributes to the strengthening of the hryvnia exchange rate.
The basis for economic growth
The banking sector remains quite stable. Not a single bank was closed in Ukraine during the year. The total net profit of financial institutions increased by 3.8 times, reaching 83.2 billion hryvnias. And this despite the fact that in 2023, banks were charged UAH 76.6 billion in income tax at an increased rate of 50%. This is 10 times more than it was in 2022.
The removal of currency restrictions and the growth of lending to businesses (+7.7%) and individuals (+20.3%) indicate really positive prospects for the growth of the economy.
