There is more cash in banks’ cash desks and less in circulation. How does the NBU explain this?
23 April 12:49
The volume of cash inflows to banks’ cash desks in January-March this year increased and amounted to UAH 712.6 billion, which is 13.2% more than in the same period in 2024. This was reported by the NBU, "Komersant Ukrainian" reports.
Cash withdrawals from banks’ cash desks during this period increased at a slower pace (by 8.4%) and amounted to UAH 703.5 billion.
“The increase in cash is due to the growth of economic activity, which was facilitated, in particular, by an increase in wages and social benefits to the population, steady consumer demand for goods and services, and stabilization of energy supply,” the National Bank explained.
What banks lent money for
Traditionally, in the first quarter of 2025, banks issued the largest amounts of cash from their cash desks for (% of total expenditures)
– customer transactions using payment cards – 86.1%;
– purchase of foreign currency from customers – 3.8%;
– reinforcement of postal operators – 3.4%.
The largest sources of cash inflows to the banks’ cash desks were (% of total cash inflows)
– trade revenue – 29.3%;
– customer transactions with payment cards – 22.4%;
– proceeds from the sale of foreign currency – 20.5%;
– revenue from all types of services – 13.3%.
Cash in circulation has decreased since the beginning of the year
As of April 1 of this year, the amount of cash in circulation in Ukraine has decreased by 2.1% (or UAH 17.3 billion) since the beginning of the year and amounted to UAH 805.1 billion.
The NBU explained this by seasonal factors, as traditionally in the first quarter of the year, cash issued in previous periods is withdrawn from circulation.
The NBU also reported that there are 2.5 billion banknotes in cash circulation for a total of UAH 796.8 billion, as well as 14.9 billion coins (excluding commemorative and investment coins) worth UAH 8.2 billion.
As of April 1, 2025, there were 61 banknotes and 187 payment coins in circulation per capita in Ukraine (as of January 1, 2025, there were 63 and 186 coins, respectively).
The largest number of banknotes in circulation is the 500-hryvnia denomination, and the largest number of coins in the 10-kopiika denomination (26.8% and 27.7% of the total number in circulation, respectively). The least amount of hryvnia 50 banknotes and hryvnia 10 coins in cash circulation is in circulation (4.4% and 1.9% of the total amount in circulation, respectively).
Banks expect an inflow of customer funds
In the first quarter of 2025, banks reported a slight outflow of corporate funds in the first quarter, while at the same time, household deposits increased. This was evidenced by the results of the NBU’s Bank Funding Survey.
In the second quarter, banks expect the inflow of funds from customers to continue, while the cost of liabilities will continue to rise.
According to the survey, banks with a share of 42% of the system’s assets expect to attract wholesale funding in the next 12 months, in particular, financial institutions expect to receive funding for recovery projects from the EU and international financial organizations.
The vast majority of banks reported an increase in total capital over the past 12 months, and most expect this trend to continue next year.
Respondents once again cited profitability as a key driver of capital increases in the near future. At the same time, a number of banks (with a total share of about 12% of system assets) reported shareholders’ intentions to increase capital in the next 12 months.
