Is There a Risk of a Mass Withdrawal from Deposits? A Banker’s Opinion
As of mid-August, the ratio of hryvnia to foreign currency deposits stands at 80% to 20%, meaning that hryvnia deposits dominate, and this ratio is unlikely to change significantly in the next 3-4 months.
This was stated by Dmytro Zamotaiev, Director of the Retail Business Department at Globus Bank.
However, the expert does not rule out that in September-October, the share of hryvnia deposits could decrease slightly—by 3-5% compared to August. According to him, there are two main reasons for this:
1) The planned expiration of deposit terms and a slight increase in the number of new depositors, resulting in a negative balance;
2) Natural concerns among citizens about the future of the hryvnia in light of a more noticeable inflationary impact.
Zamotaiev believes that a mass "flight" of clients to foreign currency deposits is unlikely. For the past 1.5 years, there has been a slow but steady decrease in interest rates on foreign currency deposits.
"From January 2023 to August 2024, dollar deposit rates decreased by an average of 1-1.2 percentage points, while euro deposits 'slimmed down' by about 0.5 percentage points. For comparison, inflation in the U.S. this year averages 3%. This means that purchasing foreign currency just to store it results in a slow loss of up to 3% of savings value annually. Meanwhile, due to low interest rates on foreign currency deposits, depositors indirectly lose up to 1.5% of the value of their funds," Zamotaiev concluded.
This was stated by Dmytro Zamotaiev, Director of the Retail Business Department at Globus Bank.
However, the expert does not rule out that in September-October, the share of hryvnia deposits could decrease slightly—by 3-5% compared to August. According to him, there are two main reasons for this:
1) The planned expiration of deposit terms and a slight increase in the number of new depositors, resulting in a negative balance;
2) Natural concerns among citizens about the future of the hryvnia in light of a more noticeable inflationary impact.
Zamotaiev believes that a mass "flight" of clients to foreign currency deposits is unlikely. For the past 1.5 years, there has been a slow but steady decrease in interest rates on foreign currency deposits.
"From January 2023 to August 2024, dollar deposit rates decreased by an average of 1-1.2 percentage points, while euro deposits 'slimmed down' by about 0.5 percentage points. For comparison, inflation in the U.S. this year averages 3%. This means that purchasing foreign currency just to store it results in a slow loss of up to 3% of savings value annually. Meanwhile, due to low interest rates on foreign currency deposits, depositors indirectly lose up to 1.5% of the value of their funds," Zamotaiev concluded.