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and imports prevailing over exports. Sensing the hryvnia would fall, citizens sold a net $100mn in January, Sologub told reporters. Last year, the hryvnia appreciated against the US dollar by 14.5%.
The National Bank insists a strong hryvnia is overall positive for the country,​ despite hurting exporters’ margins and tax revenue. The bank argues “First, it helped reduce inflation to the target of 5%, which is, in particular, an important step in lowering interest rates and intensifying lending. Secondly, it caused savings of the state budget for servicing foreign currency debt," in a Facebook post. “The hryvnia appreciation seen this year, as well as the rapid growth in Ukrainians’ nominal wages over the past few years, is a strong driver slowing labour migration,” central bank Deputy Governor Oleg Churiy said last year. “Our people are notably less interested in looking for work abroad.”
8.0​ Financial & capital markets 8.1​ Bank sector overview
Profits in Ukraine’s banking sector tripled in 2019 to hit UAH59.6bn ($2.5bn) as of December as the sector stepped onto square two and a full recovery of the sector is now well underway.
At the same time non-performing loans (NLPs) have begun to fall which remains the biggest challenge the bank sector is facing.
Rising incomes, economic growth and improving confidence are all supporting the recovery of the banking sector. The sector’s profits were a new “record high,” Kateryna Rozhkova, first deputy governor of the National Bank of Ukraine said on Facebook. “I will disappoint critics that these are not super-profits of state-owned banks from government bonds. This is the real profit of the banking sector. If you look at the interest income of state-owned
35​ UKRAINE Country Report​ March 2020 ​ ​www.intellinews.com