Inflation in Ukraine breaks the records. Since the beginning of the year prices have increased by 20.3%, as compared to March of the last year - by half. In April, the rates of price increase will still be high, and then they will go into decline. Experts believe that the NBU will not be further clamping the hryvnia liquidity, but the threat of the rising cost of resources for banks still remains.

Price breakthrough

March price leap in the consumer market has been estimated modestly by the State Statistics Service – in the form of 10.8-percent inflation. This is more than double the price rate growth's in February (5.3%). For the 12 months since March 2014, the prices calculated for the consumer basket of an average Ukrainian have already increased by a record 45.8%, while in the 1-st quarter of 2015 - by 20.3%. The last time prices rose faster was in the beginning of 1996 (+ 21%). Thus, this price jump was unique since the introduction of the national currency - the hryvnia.

Prices for fruits, sunflower oil and sugar rose in March most of all - by 31.9-39.2%. Prices for non-alcoholic beverages, vegetables, rice, bread, pasta and fish rose by 16.9-29.4%. Overall, food prices went up less - by 15.6%, because eggs, cheese, milk and meat rose by only 1.2-6.2%. Products, the prices for which are dependent on the value of the imports, i.e. clothing, footwear and household appliances, were also slowly becoming more expensive (10.4-13.3%). Growth of the prices for transport by 7.4% was caused by rise in the price of transport services (+ 9.7%) and fuel (+ 9.3%).

The implementation of this scenario is a new challenge for the banking market. As reported by FinMaidan, Privatbank in pursuit of deposits is ready to spend more than 30% per annum (see "Tax-free generosity Promotion"). "The cost of hryvnia resources is highly dependent on the inflation. If you take pure theory, one should not keep money in the bank below the rate of inflation. Otherwise, it will eat up the money. If the government says about the possibility of an inflation of 42% - it has not happened yet, but it is declared - we can expect that the interest rates on deposits will go up. Accordingly, the lending rates will rise. Now this is not happening so quickly, and thanks to God. Because the rates are very high already. But in principle, rates should always depend on inflationary expectations, " FUIB's Deputy Chairman of the Board, Olexiy Volchkov, as early as in March explained the risks of high inflation.

You can read a full version on the website FinMaidan