The IMF demands that Ukraine reduce interest rates on bank deposits
The International Monetary Fund demands that Ukraine adopt a law to reduce bank interest on deposits.
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“It’s simple: the largest borrower is the state. The volume of internal borrowing is 700 billion hryvnia, and it is extremely unprofitable for the state to pay such huge interest,” – writes the Ukrainian publication “The Economist”.
In addition, the lack of lending has a negative impact on the Ukrainian economy:
“There can be no talk of any economic growth at the current percentage in the country. Today, Ukrainian banks do not lend to anyone, no one at all - neither individuals nor legal entities. Not only is this very bad for the economy, but it could also be a real disaster for the banking industry itself if it goes on for any longer.”
It is noted that the deposit system in the country is extremely unviable.
“Banks, of course, attract deposits from the population, but they cannot apply them or issue them as loans to anyone. At the same time, a huge infrastructure in the form of hundreds of branches, thousands of employees and many other expenses puts pressure on the financial performance of banking enterprises. It is not clear who will pay depositors their interest. Whether the guarantee fund will be able to survive in the event of a massive collapse of Ukrainian banks is also unknown,” the material says.
The media reminds that Ukraine has been seriously cooperating with the IMF for only two years.
“During this time, a lot has been done, the speed of macroeconomic changes is high. Therefore, the issue with rates will most likely be resolved very soon. Deposit rates are already falling. And the situation in the country, both politically and financially, remains quite tense,” the article says.
And as the Kiev publication Obozrevatel reports, the Verkhovna Rada should allow the sale of agricultural land in order to receive a new IMF loan in May.
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