The National Bank of Ukraine starts publishing analysis of banking system liquidity. Information to be published in the section “Analysis of Banking System Liquidity” on a daily basis aims to provide market participants with current data about the liquidity of the banking system and factors causing changes in liquidity.
Understanding of the main factors affecting the banking system’s liquidity allows each market participant to adopt a more prudent approach to forecasting and managing their own liquidity, enabling market participants to rely on objective benchmarks to plan their operations in the interbank market and determine their possible needs for participation in liquidity management operations conducted by the NBU.
Consequently, market participants will adopt a more rational behavior, which would reduce the risk of sudden major fluctuations in demand/supply in the interbank market and, accordingly, help smooth out interest rate volatility.
Market participants will receive information on correspondent accounts balances at the start of a business day, which is the total amount of holdings on correspondent and transit accounts of banks opened with the NBU.
Also, information will also highlight factors affecting the changes of banks’ correspondent accounts compared with the previous business day. In particular, for the purposes of monetary analysis, factors affecting the changes of banks’ correspondent accounts are conventionally divided into the NBU monetary policy operations and autonomous factors.
NBU monetary policy operations refer to operations of the central bank aimed at having a direct regulatory impact on the money market with the view of achieving the operational targets of monetary policy. They include:
- standing facilities (overnight loans and overnight certificates of deposit (CDs);
- tenders, including main liquidity management operations, refinancing tenders, and operations with NBU certificates of deposit;
- other monetary policy instruments, which include: repos, purchase and sale of Ukrainian government bonds, foreign exchange market interventions, provision of stabilization loans, and foreign currency swap transactions.
Autonomous factors include NBU operations that are not aimed at performing a direct regulatory impact on the money market. They include cash supply for banks' vaults, servicing the STSU and the DGF, and other operations conducted by the NBU. Unlike NBU monetary operations, autonomous factors affecting banks’ correspondent accounts are, in general, beyond the NBU’s direct control. Their influence on banking system liquidity is leveled/adjusted, if necessary, through monetary policy operations.
Data published in the table Current Data on Banking System Liquidity and Factors Affecting Liquidityd displaying operations for the previous business day is updated by 11 a.m. on the next business day and will be revised by the end of the corresponding business day. Current data published in the table Reference Data (except for information concerning reserve requirements) is updated each business day by 6 p.m. Information concerning reserve requirements in the table Reference Data is updated on a monthly basis on the fourth business day after the end of the previous receiving period. Data Archive tables are updated by 18:00 p.m. each business day.
This information will be published in the "Analysis of Banking System Liquidity" subsection of the “Financial Markets” section on the NBU’s website (available in Ukrainina and English).
Going forward, the NBU plans to further complement this section with information on liquidity forecasting for the next week.
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