Financial news

Interest rates decrease at DEPO-market

International currency market. On Wednesday, March 21, Catholic world celebrates Good Friday. That is why markets in Western Europe and the USA were closed. All currencies are traded in short range: EUR/USD pair in the range of 65 points, GBP/USD — 45 points, USD/CHF — 50 points.

Despite US dollar rate increase observed in the last few days, International monetary fund esteems that US economy still remains very week and approaches recession. According to forecasts, in 2008 oil will cost about US $95 per barrel. IMF also supports Central European Bank position as regards invariance of key interest rate. As for Fed efforts to appease the market, they were natural.

Current technical levels concerning main currency pairs:

At Ukrainian inter-bank currency market there is still high currency offer, which against the background of NBU non-interference in the course of bids on Thursday when quotations decreased down to minimum level since December 2006, resulted in US dollar felling down to its low since August 2005 when NBU carried out no currency interventions yet.

Bids were opened with dollar rate setting in the range of 4,96/5,00 and gradually decreasing to 4,92/4,96 per $1. Dollar offer is still high while NBU made it clear that it had no intention to interfere in the bids within the next few days. That is why dollar traders had to sell their currency at the highest possible market rate, which under the pressure of considerable selling was felling further.

During the session, US dollar rate fluctuated within the range of 4,92/5,00, with 4,960/5,005 a day earlier, and the majority of deals were concluded by market participants within the range of 4,94/4,97, with 4,985/5,000 per $1 the day before.

As reported earlier, exchange rate decrease at inter-bank is connected in some extent with UAH resources shortage. But UAH remains at correspondent accounts of commercial banks at NBU were rising steadily since the beginning of the week and having increased in the total by more than 2 b. Thus, UAH liquidity situation improvement can with the lapse of time suspend dollar sell-out and its quotations can return to usual range upwards of 5,00/$1.

At DEPO-market interest rates keep decreasing before weekend, as UAH liquidity in banking system rose during the week more than by UAH 2 b.

Thus, UAH "overnight" fell today by the end of the day down to 4,0/7,0%, from 10,0/15,0% in the morning and 10,0/20,0% on Thursday. Average weighted price in concluded deals decreased more than by 5 % up to 11,3 %. Concluded transactions volume was UAH 3,03 b, with 3,74 b a day earlier.

Rates on credits  for a period "from 2 to 7 days" are less liable to recession, they fluctuated today within the range of 13,0/16,0%, in comparison with 14,0/22,0% on the previous business day. Average weighted price fell down to 14,9%, from 17,0% on Thursday.

Rates on credits for a period "from 22 to 31 days" are today 10/13%, with 21,0/22,2% a day earlier.

Comments by S.N. KRAMAROVA, Head of Treasury

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