Ukrainian economy

2009

Ukraine's banking system recorded losses of 7 billion hryvnias (UAH) ($909 million) in the first quarter of 2009 compared to a profit of 2.1 billion hyrnvias in the same period a year ago, according to a central bank report of April 22, 2009.[29] In April 2009 the IMF forecast a 8.0 percent shrink of the Ukrainian economy in 2009 and a 1.0 percent grow in 2010.[30] Mid-April 2009 Ceyla Pazarbasioglu, the IMF mission chief in Ukraine, stated that there were a number of encouraging signs that Ukraine's economy had started to adjust to the global crisis. According to Olena Belan, analyst at Dragon Capital, "that is a good signal for investors, showing that Ukraine is taking anti-crisis measures and the economic situation is under control."[31] Foreign direct investment did plunge 66% (to $2.7 billion) in the first half of 2009.[32]

On May 18, 2009 Ukraine's State Statistics Committee reported that the deficit of Ukraine's foreign trade in the first quarter of 2009 was estimated at $419.7 million, which was 9 times down on the same period the previous year.[33] 

The Ukrainian state became the de-facto owner of Ukrhazbank (84.21% after investing UAH 3.2 billion), Rodovid Bank (99.97% after investing UAH 2.809 billion) and Bank Kyiv (99.93% after investing UAH 3.563 billion) early June 2009.

The industrial output of Ukraine in the period January-August 2009 shrank by 29.6% compared bij the same period in 2008. The fall in Ukraine's industrial output slowed to 26.7% in July 2009 compared to July 2008, compared to a fall of 27.5% in June and 31.8% in April and May 2009 (compared to 2008 again).[35]

On September 17, 2009 the World Bank approved a loan for Ukraine in the amount of $400 million

According to a public opinion poll conducted by FOM-Ukraine in September/October 2009 46.2% of those polled thought that the economic situation in the country would worsen within the next few months, while 35% stated that the economic situation in Ukraine would remain unchanged and 8% thought the situation would improve.

On November 1, 2009 the International Monetary Fund (IMF) warned that it could cut financial assistance to Ukraine, Managing Director of the IMF Dominique Strauss-Kahn stated he was “very worried” with President Viktor Yushchenko’s decision to sign a bill adopting wage and pension increases. Prime Minister Yulia Tymoshenko accused Yushchenko and other candidate for the Ukrainian presidential election, 2010 of backing the increase to sabotage her government and thereby undercutting her presidential bid.[38] 

Late November 2009 acting vice governor of the National Bank of Ukraine Vasyl Pasichnyk forecasted no mass bankruptcies in the Ukrainian banking sector.[39]

2010

Ukraine's total foreign debt (state and corporate) had reached 93.5% of the 912.563 billion Hryvnya GDP in March 2010;[40] late February 2010 the Ukrainian Finance Ministry had reported that the country's total state debt by early 2010 was to 32.9% of the GDP.[40] Standard & Poor's upgraded Ukraine's rating the same day.

March 18, 2010 the National Bank of Ukraine stated the total external debt in Ukraine increased 2.3% to $103.973 billion in 2009[42], and it considered a 4% GDP growth realistic for 2010 the same day.[43] 

The Ukrainian economy recovered in the first quarter of 2010 due to stronger-than-expected growth in the global economy, driven primarily by emerging Asia and Latin America, larger social transfers to the population approved in the 2010 budget law and a lower price for imported natural gas (due to the 2010 Ukrainian–Russian Naval Base for Natural Gas treaty) 

National Bank of Ukraine 

National Bank of Ukraine (Ukrainian: Національний банк України) is the central bank of Ukraine. Its headquarters building, constructed between 1902 and 1934, is located at no. 9 Institutska St., in Kiev 

History 

Prior to the collapse of the USSR, the National Bank of Ukraine was a branch of the Central Bank of the USSR. Officially, the National Bank of Ukraine acted as the Central Bank of Ukraine since early 1992. Like institutions of many newly independent nations, it faced dire financial straits during the 1990s, leading to a prolonged period of hyperinflation. 

On March 20, 1991, the Verkhovna Rada of Ukraine adopted the resolution "On Banks and Banking Activity", which became Law on May 1. The resolution declared ownership by the Ukrainian SSR of the Ukrainian Republican Bank of the State Bank of the USSR, the Ukrainian Republican Bank (affiliate) of the State Commercial Industrial-Constructional Bank of the USSR, the Ukrainian Republican Bank of the Savings Bank of the USSR, and the Ukrainian Republican Bank of the ForeignEconomBank of the USSR as well as the Ukrainian Republican Department of Encashment of the State Bank of the USSR. The National Bank of Ukraine was resolved to be created on the basis of the Ukrainian Republican Bank of the State Bank of the USSR. 

Former President of Ukraine Viktor Yushchenko was Governors of the National Bank of Ukraine from January 1993 to December 1999, before becoming Prime Minister.

Legal Status and Structure

Logo of the National Bank of Ukraine 

The legal status of the National Bank of Ukraine and the principles of its organization and activities are determined by the Constitution of Ukraine and the Law of Ukraine "On the National Bank of Ukraine"[1]. 

The National Bank of Ukraine is a legal entity with separated property, which is the object of the state property. Its authorized capital amounts to UAH 10 million and is the state-owned property which is in the full economic competence of the National Bank. 

According to Article 99 of the Constitution of Ukraine, adopted in 1996, the main function of the country's central bank is to ensure stability of monetary unit - the Hryvnia. To carry out its main function, the National Bank shall foster the stability of the banking system and, within its competence, the price stability. 

According to the Law of Ukraine "On the National Bank of Ukraine", the National Bank is the central bank of Ukraine, a specific central body of the state administration, its issuing center which pursue common state policy in money circulation, credit, strengthening of monetary unit; it coordinates functioning of the banking system in general; determines exchange rate of the monetary unit against foreign currencies. The National Bank determines a kind of bank notes, their denomination, distinctive features and their protection system. The National Bank of Ukraine ensures the accumulation and custody of the gold and currency reserves and the conduction of transactions with them and the banking metals. The National Bank of Ukraine sets up the order of determining a discount rate and other interest rates; it gives permission for commercial banks' registration and licenses banking business; determines the standard of emergency funds for commercial banks and other financial and credit institutions. 

The National Bank of Ukraine has the power to initiate legislation.

The National Bank of Ukraine is governed by the Head of the National Bank of Ukraine and its directory, while its functions are coordinated by the Council of the National Bank of Ukraine. The council consists of 15 members including the Head of the National Bank as the ex-officio position. The other members of the council are appointed by an equal quota of seven members from the President of Ukraine and the Verkhovna Rada.

Functions 

According to the Constitution of Ukraine, the main function of the National Bank is to ensure the stability of Ukraine's monetary unit. To carry this out the National Bank fosters the stability of the banking system and, within its competence, price stability. 

The National Bank also carries out the following functions:

to determine and pursue the monetary policy in accordance with the General Principles of the Monetary Policy developed by the Council of the National Bank of Ukraine;

to issue the national currency of Ukraine on a monopoly basis and to organize its circulation;

to establish the rules of conducting banking transactions, accounting and reporting, protection of the information, funds and property for the banks and other financial and credit institutions;

to organize and to provide the methodological support to the system of the monetary, crediting and banking statistical information and the statistics of the balance of payments;

to determine the areas of the development of modern electronic banking technologies, to establish, co-ordinate and control the creation of electronic means of payment, payment system, banking automation and the banking information protection facilities;

to exercise the banking regulation and supervision;

to keep a Register of banks, their branch and representative offices, currency exchanges and financial and credit institutions, to license banking business and transactions, if provided for by the laws;.

to compile, analyze and forecast the balance of payments;

to represent Ukraine's interests in central banks of other states, international banks and other crediting institutions, where the cooperation takes place at the level of central banks;

to exercise the currency regulation with the competence to be defined by a special law, to determine the procedure of effecting payments in the foreign currency, to organise and exercise the currency control over the commercial banks and other credit institutions which are in possession of a National Bank's license for the transactions with currency values;

to ensure the accumulation and custody of the gold and currency reserves and the conduction of transactions with them and the banking metals;

to analyze the status of the monetary, crediting, financial, pricing and currency relations;

to organize the collection and transportation of bank notes, coins and other values;

to implement the national policy of the protection of state secrets within the system of the National Bank;

to take part in the training of personnel for Ukraine's banking system;

to exercise other functions in the monetary and crediting sphere within its competence defined by the law.