Page 45 - UKRRptMar21

As Ukrainians move toward cashless transactions and internet banking, banks closed 11% of bank branches last year, to 7,100​, the National Bank of Ukraine reports in its banking sector review. The closing of 868 branches contributed to banking layoffs of 5,000 employees. The number of ATM machines dropped last year by 3%, to 34,800. At the same time, point of sale card terminals increased by 10.6%, to 386,500. In the fourth quarter alone, PrivatBank and other state banks added 11,000.
8.1.4 ​Bank news
8.2 ​Central Bank policy rate
PrivatBank, Ukraine’s largest and most profitable bank, is moving aggressively into the cashless economy​. Last month, despite almost three weeks of lockdown, Ukrainians made 137mn cashless payments through PrivatBank trading terminals -- almost double the 72mn recorded in January, 2020. The bank reported Monday that shoppers used cards to pay for $11.6bn worth of goods through PrivatBank terminals, almost one third more than in 2019. The state-owned bank currently has 241,000 point of sale terminals. Almost 90% accept contactless payments by cards or smartphones.
The National Bank of Ukraine (NBU) reversed its easing policy and hiked rates for the first time since June 2020 by 50bp to 6.5% ​at its monetary policy meeting on March 4.
The NBU has been slashing rates in the last two years as it has been highly successful in taming inflation which fell to a post Soviet low of 1.7% in May 2020. However, more recently inflation started rising again on the back of rising food prices and reached 6.1% this January.
With inflationary pressures still present the regulator decided to act to head off further appreciation as other central banks in the region have been forced to for the same reasons. The NBU has an inflation target of 5%, plus/minus 1pp.
Following the NBU decision it said in its statement:
Consumer inflation increased to 6.1% y/y in January. Inflation continued to accelerate in February according to the NBU’s preliminary estimates. Consumer inflation reading, which was calculated using online monitoring data, exceeded the NBU’s forecast, while inflation expectations remained elevated.
At the same time, the underlying inflationary pressure, as seen in core inflation, was generally in line with the regulator’s forecast trajectory in January–February. Food and fuel prices contributed most to the rise in inflation in the first months of 2021. This is explained by poorer harvests and a rapid growth in global commodity prices, fueled by the fast pace of the revival in the global economy. Inflationary pressures from trading partner countries continued to increase. Domestic consumer demand remains robust. Moreover, the price trend continues to be influenced by the effects of last year’s hryvnia depreciation.
45​ UKRAINE Country Report​ March 2021 ​ ​www.intellinews.com