Deposit rates in October 2020 fell to 8.9% – banks – National Bank of Ukraine – credit – deposit

Photo: bank branch (Vitaliy Nosach, RBK-Ukraine)

Deposit rates keep falling

In October 2020, the average interest rates of banks on new deposits in hryvnia for the population amounted to 8.9% per annum. This is 0.2 pp. lower than in September (9.1%).

This is evidenced by the operational data of the National Bank of Ukraine.

According to the NBU, the rates on new deposits for the population in foreign currency did not change in October – 1.3%.

In October 2020, the rates on hryvnia deposits for companies decreased from 3.9% to 3.8% annually, while deposits in foreign currency did not change: 1.1% annually.

Banks’ deposit portfolio in October grew by 1.8% to UAH 1.29 billion, incl. the population grew by 1.6% to 652 billion UAH, businesses grew by 2.1% to 616 billion UAH.

Let us remind you that the NBU predicts a decline in deposit rates at banks. In the context of declining devaluation expectations and low inflation, banks still have scope to cut interest rates in hryvnia on time deposits. This is indicated in particular by the significant “gap” between banks’ interest rates and the NBU discount rate, which today has dropped to a record 6%.

Note that, according to the NBU, the interest rates on new bank loans for the population in October 2020 in national currency were 35.2% per annum. Compared to September, the rates have not changed.