Economy and politics

The International Monetary Fund (IMF) confirmed a 30-month stabilization credit line for Ukraine amounting to SDR10 bln, which is about USD 15.2 bln if special borrowing rules are taken into account. Ukraine plans to receive the first USD 3 bln by the end of 2010.

According to the preliminary data on balance of payments published by the National Bank of Ukraine, the current account surplus in 1H 2010 is USD 472 mln and the financial account surplus is USD 3.96 bln.

In June 2010, industrial production in Ukraine decreased by 0.5% mom and 8.9% YoY.

National Bank of Ukraine (NBU) cut interest rates by 1% to 8.5%, but left the overnight credit rate unchanged.

CPI deflation in Ukraine in June 2010 slowed down by 0.4% mom, which equals 6.9% YoY, compared to 8.5% YoY in May. PPI reduced by 0.5% mom, or 25.5% YoY.

The Ukrainian Ministry of Finance plans to issue sovereign Eurobonds in July 2010, Deputy Ministry Mr. Andriy Kravets recently announced. According to Kravets, the volume of the issue hasn’t yet been determined and would depend on investor demands. Mr. Kravets also noted that the Ministry anticipates the issue to yield 6-7%.

The president’s clipping service announced that the Gross Domestic Product (GDP) of the Ukraine grew by 6.1% from January-May 2010 as compared to the period of January-May 2009.

The Ukrainian trade balance in Jan-Apr 2010 amounted to – USD 1.88 bln, 5.8% better than in Jan-Apr 2009. Export increased by 28.1% - to USD14.56 bln, import by 23% to USD 16.44 bln.

In 2010, National Bank of Ukraine has increased foreign reserves by USD 2 bln to USD 28.5 bln.

After cutting the interest rate from 10.25% to 9.5%, the National Bank of Ukraine (NBU) also cut refinancing rates to 10.5% on collateralized overnight loans and to 12.5% on blank overnight loans.