Announced Official Funding Of USD 12 Billion Expected To Arrive By End Of Year - NBU

By the end of the year, the announced official financing is expected to arrive in the total amount of about USD 12 billion.

This is stated in the message of the NBU, Ukrainian News Agency reports.

Progress in cooperation with international partners, including the IMF, is an important prerequisite for the stable functioning of the economy in wartime conditions.

By the end of the year, it is expected to receive announced official funding in the total amount of about USD 12 billion (equivalent), including EUR 8 billion within the framework of the macro-financial assistance program from the EU.

Thanks to further international support, the National Bank will be able to maintain gold and foreign exchange reserves at a sufficient level in the years to come.

A longer period of full-scale Russian military aggression against Ukraine remains a key risk for economic development.

The speed of recovery of the Ukrainian economy and the return of inflation to the trajectory of slowing down largely depend on the timing of the end of the active phase of the war.

Other inflationary risks have decreased in the short term since the July decision of the Board of the National Bank on the discount rate.

Instead, they remain significant in the longer term.

In particular:

• the opening of the Black Sea ports for grain export took place earlier than assumed in the base scenario of the July macro forecast of the National Bank. The "Grain Agreement" makes it possible to increase the volume of export earnings beyond the forecast of the National Bank, which will have a positive effect on the state of the foreign exchange market. However, the stability of supplies via the sea route remains vulnerable, in particular, taking into account the latest statements of the authorities of the aggressor country;
• the lack of progress in the return of excise duty on fuel and additional taxation of imports causes less pressure on prices in the short term. At the same time, in the longer term, insufficient measures to limit imports and balance public finances through the mobilization of additional tax revenues create risks both for fiscal stability and maintaining control over inflationary processes, and for macro-financial stability in general;
• the implementation of new financial support initiatives from the U.S. will make it possible to increase the volume of Ukraine's international reserves in 2022 beyond the forecast, which will positively affect the stability of the economy and expectations. Instead, the prospects for non-emission financing of the budget deficit in 2023 remain largely uncertain;
• still low rates for hryvnia government domestic loan bonds at primary auctions, in particular compared to yields on the secondary market, significantly limit the amount of government borrowing. This restrains the monetary transmission and the growing attractiveness of hryvnia assets, which increases the sensitivity of the currency market to situational factors and risks to financial stability in the longer term;
• migration rates remain higher than the National Bank assumed, which threatens to reduce the labor force and have long-term negative effects on the labor market and post-Victory economic growth.

As Ukrainian News Agency earlier reported, at the end of August, Ukraine received USD 3 billion of the USD 4.5 billion grant from the United States from the Trust Fund of the World Bank.