You're reading: Business Update – April 10: Banking bill stalled, EU to credit Ukraine’s small business

Money supply in Ukraine is up 2.8% in March. The amount of money circulating in Ukraine increased by 2.8% this month, reaching Hr 1.518 trillion ($56 billion), according to preliminary data from monetary statistics posted on the website of the National Bank of Ukraine (NBU).

Businessman Oleksandr Yaroslavsky has agreed to purchase Bank Credit Dnipro. The National Bank of Ukraine (NBU) has received documents from the representatives of the Ukrainian businessman to purchase 100% of the charter capital of Bank Credit Dnipro, which is currently owned by Ukrainian businessman Victor Pinchuk. The NBU is now considering the acquisition.

The Deposit Guarantee Fund spent Hr 24.4 million ($890,000) to reimburse depositors of insolvent banks in March. The sum in March is 1.4% more than in February, when it was Hr 24.1 million. According to the Fund, for the quarantine period from March 18 to April 6, the total amount of payments totaled Hr 12 million. The total amount of payments the Fund has made since 2012 has reached Hr 90 billion ($3.3 billion).

The European Union wants to provide Ukraine’s businesses with credit. The EU is working with international financial institutions to provide small- and medium-sized enterprises in Ukraine with credit lines of Hr 10 million ($368,400) and 10 million euros, Matti Maasikas, head of the EU Delegation to Ukraine, said. “I look forward to the opportunity to announce specific details soon,” he said.

Inflation increased to 0.8% in March, but slowed to 2.3% in annual terms. Consumer prices in Ukraine – after falling by 0.3% in February – rose by 0.8% in March, according to the State Statistics Service. At the same time, in March 2019, price growth was even higher – 0.9%. Therefore, in annual terms, inflation in March 2020 slowed to 2.3% from 2.4% in February, 3.2% in January and 4.1% throughout 2019.

The World Bank will allocate $50 million to Ukraine to support vulnerable groups amid the COVID-19 pandemic. The World Bank will additionally give Ukraine $50 million to support vulnerable segments of the population during the coronavirus pandemic, the Ministry of Social Policy has reported. In total, Ukraine will receive $150 million from the organization to ease the economic effects of the pandemic. “These funds will be used to pay pensioners, recipients of social assistance due to disability,” the ministry has said. The money will also go toward increasing subsidies and supporting those who have lost their jobs due to quarantine.

Parliament Speaker Dmytro Razumkov cannot say when parliament may pass the bank bill, even though the law is necessary for the IMF agreement. The law has to go through the second reading to pass, but Razumkov does not dare predict when the parliament will vote for it, given that lawmakers have submitted 16,000 amendments to the original text of the bill. The parliamentary committee should first review the amendments. Only after that can this document be considered for a vote in parliament, he said. Meanwhile, this bill is necessary for Ukraine to receive an $8-billion loan from the International Monetary Fund.

The EU ambassador to Ukraine thinks the banking law’s adoption is a vital test for Ukraine. “Of course, the pending legislation on the banking resolution is a litmus test in many ways,” Matti Maasikas, head of the EU delegation to Ukraine, has said. The transfer of 500 million euros to the national budget of Ukraine under the macrofinancial assistance program in the form of a low-interest loan from the EU depends on the adoption of this law, he said. “So, in that sense, the IMF-related, but even more so, the Ukraine-related, Ukrainian society-related banking resolution law is a vital litmus test.”