So is the deposit run?
No, don’t run. After all, your money is a commodity and the pillar of the economy at the same time. If you deposit your savings, then the bank lends money, for example, to business. You get the interest, the entrepreneurs get the money to grow, earn more, and eventually push more taxes into the budget. These are all parallel and closely related processes.
There are those who lend it. At the end of last year, there was a record increase in demand for business loans – the largest demand was for short-term loans, hryvnia and loans for small and medium enterprises. Growth is expected in 2022 – such forecasts are in most Ukrainian banks.
So with an early withdrawal of the deposit, you will not only lose the accumulated interest – the business can also be left without cash.
Neither the NBU nor Ukrainian banks reported a sharp outflow of deposits. This is a good sign for the economy.
And don’t buy dollars?
no need. Although the dollar has risen from 27.3 hryvnia per unit to almost 29 hryvnia since the beginning of the year at the official exchange rate of the National Bank, this does not mean that it is urgent to run and buy dollars as a reserve.
First, it happens every year. If you look at the hryvnia against the dollar over the past few years, you will notice that the US currency usually rises in the period from January to February, when businesses need it. And it gradually declines in the summer, when grain is sold abroad, while Ukraine receives the currency. The cheapest dollar is often from November to December, when Ukrainians sell their shares in preparation for big purchases or the New Year.
Of course, there are exceptions. Thus, in 2020, at the beginning of the Corona crisis, the dollar rose in March – against the background of the first COVID-19 patients in the country and general panic. This year, in addition to seasonality, the dollar is also gaining news of a possible Russian invasion.
Secondly, the dollar in Ukraine is a commodity. And buying a product during a rush is always a bad idea. Just remember how prices rose, for example, wreaths before the New Year holidays or how flowers became more expensive before Valentine’s Day or March 8. You probably have no idea buying stock LEDs in December. You can buy them only when needed, and you can stock up on discounts after the New Year. The same with currency.
If the demand for the dollar increases, its price will rise. This will only stop the injection of new currencies into the market. Once this leak was the sale of a Ukrainian football player to a foreign club. In his interview in 2019, the then First Deputy Minister of Economic Development and Trade Maxim Nevedov said that the sale of one of the Shakhtar players was the only thing that prevented the hryvnia from declining by 40. The NBU standard on the mandatory sale of foreign exchange earnings helped.
It is clear that most Ukrainians understand this situation. Thus, the Chairman of the Board of Directors of the National Bank said on January 20 last, that there is no panic in the foreign exchange market. Nor is the NBU an administrative regulation – any bans or restrictions on the purchase of currency.
2018. On November 25, Russian ships fired on and detained Ukrainian ships near the Kerch Strait. Six of our sailors were wounded, and a total of 23 Ukrainian boats – three soldiers.
On November 26, martial law was imposed in Ukraine for a month.
Remember the uncertainty, fear and panic of this time? It was then that the NBU recorded turmoil in the foreign exchange market and a drop in deposits with banks.
To extinguish the excitement, the NBU sold $125 million on the market in the first week of martial law. This was the price of a week of panic.
This excitement did not last long. Later it turned out that Russia was not yet planning a new, large-scale attack, so the Ukrainians ceased to worry so much. At that time, the regulator was able to balance the situation and quickly – in the first half of December – already bought $ 700 million.
So far, Ukrainian banks have not experienced a sharp influx of deposits or an unusual demand for currency. And if this continues, we have a chance to get through this period of crisis without another big infusion from the National Bank. However, if everyone thinks that the dollar will rise and the cash in the banks will run out, and they will take deposits and buy foreign currency, then it will happen. After all, panic is the worst enemy of the economy.