According to the latest data of the National Bank at the at the end of April 2013 the bank account balances of the population in national currency totalled 217 billion UAH, which exceeds the last year's results by 30.23 billion. At the same time the amount of dollar savings has not changed significantly during 4 months of the current year and totalled 149.48 billion in the UAH equivalent. However, the increase in the dollar portfolio on an annual basis is 23.2%, which still exceeds the results of hryvnya (20.5%). "In the summer of 2012 an increase of deposits in hryvnya was observed, thus in September-December, it was replaced by a substantial increase in the deposit portfolio in foreign currency. Since the beginning of this year the situation has been stabilized, and by the end of 2013 the increase in hryvnya deposit portfolio may catch up with or even exceed the similar indicator for the deposits in dollars", – predicts Stephan Guglieri, Chief Executive Manager of FUIB.

The interviewed bankers do not mark the mass transfer of foreign currency deposits in hryvnya. Nevertheless, there are some precedents. Negative dynamics of foreign currency deposits of the population has been observed for several months. To show hryvnya deposit products to advantage, many banks set especially low rates for dollar deposits – 5.2% per annum, while the average market rate is about 7%. At the same time experts state that the ratio of the shares of hryvnia and U.S. dollar in the bank's deposit portfolios is changing slightly. Reluctance of banks to increase the portfolio of foreign currency deposits is largely explained by a number of control measures aimed at the supporting of national currency.

Further development of the situation will depend on the stability of the currency market. "We expect a slight temporary slowdown in the increase in hryvnia deposits in the second and third quarters of this year, associated with expectations of a slight devaluation of the national currency in the 4^th quarter of this year. The latter may entail some reorientation of depositors to the foreign currency deposits," – says Stephan Guglieri. On the other hand, banks can become interested in the foreign currency resources. They will direct them to buy dollar sovereign bonds, as well as to give credits the corporate sector, which has foreign exchange revenues.

Source: IA "LigaBusinessInform"