In July and August, several important interrelated factors could affect the yield levels of hryvnia deposits.
Dmytro Zamotaiev, Director of the retail business department at GLOBUS BANK, shared his insights.
According to him, the main factors may include:
- Inflation rate. The impact of rising electricity tariffs and the expected increase in fuel excise taxes could lead to a corresponding rise in consumer prices, which would affect inflation rates. As of May, inflation was 0.5%, and for the first five months of the year, it was 2%. However, inflation could accelerate to 1-1.5% per month by the end of summer, which is considered acceptable (according to government officials, annual inflation should not exceed 8.2%).
- Discount rate and rates on 3-month deposit certificates. It is expected that at least until the end of summer, the discount rate will remain at 13%, and the rate on 3-month deposit certificates will also remain unchanged at 16%, forming the basis for hryvnia deposit yields.
- Situation in the foreign exchange market. During the summer, a "controlled" devaluation of the hryvnia is expected to be moderate and will not exceed 0.5-1% in total. By September, the dollar exchange rate corridor is expected to shift towards 41-41.5 UAH/USD.
- Net profit from deposits. By September, the net profit from hryvnia deposits, considering inflation, necessary bank fees, and taxes, is expected to be relatively high, averaging 4-5%, which may encourage citizens to place funds in hryvnia deposits.
- War conditions. An indirect but important factor that, along with economic factors, may affect the activity of citizens planning to place funds in deposits.
The banker believes that by the end of 2024, the economic situation in the country will remain favorable for the further development of hryvnia deposits. Moreover, for the vast majority of citizens, hryvnia deposits remain the most acceptable and understandable mechanism for generating passive income.
“Despite the expected and forecasted devaluation processes observed in April-May and likely to continue in the autumn, this is unlikely to significantly affect citizens' intentions not only to preserve but also to increase their wealth. Therefore, hryvnia deposits will remain an optimal, understandable, and quite profitable mechanism for this purpose,” concluded Dmytro Zamotaiev.
