Finance of Enterprises. Payments Crisis

During January-February 1998, every second Ukrainian enterprise was loss making. As of 1 March 1998, the overall amount of debit indebtedness and credit indebtedness were UAH 75,820.4 mln and UAH 103,211.5 mln, respectively. During February, debit indebtedness increased by 3.5%, creditor indebtedness -- by 4.3%. In the structure of credit indebtedness, 94.8% belongs to indebtedness between Ukrainian enterprises, 1.9% - to indebtedness between Ukrainian enterprises and enterprises of former USSR republics, and 3.3% - to subjects of business activity from other countries. In the structure of debtor indebtedness, these shares are 96.1%, 1.0%, and 2.9%, respectively. The share of overdue indebtedness is 73.6% of the overall debit indebtedness and 75.8% of the overall credit indebtedness.

Monetary Sphere

Table 9
Money Supply in Circulation as of the End of the Period, mln UAH
Monetary AggregatesJanuary 1998February 1998
Cash (MO)58965825
M186398507
M21191912095
M31207412238
Monetary base67956621


According to preliminary estimates, as of 1 April 1998, the M0 aggregate (cash) was UAH 6,390.57 mln; money supply M3 -- UAH 12,950.42 mln; monetary base UAH 7,217.67 mln.

In February, the average weighted interest rates of Ukrainian commercial banks were 48.7% per annum for credits and 16.2% for deposits.

The balance of indebtedness related to credits granted by Ukrainian banks during January-February increased by 1.7%, or UAH 225 mln and as of 1 March 1998 it amounted to UAH 13,383 mln, including UAH 8,672 mln of credits denominated in the national currency. In 1997, the NBU discontinued direct crediting of the Government of Ukraine meant for covering the state budget deficit. Therefore, the balance of indebtedness related to this kind of credits provided during 1992-1996 has remained unchanged since 1 September 1996 -- UAH 3,568 mln. As of 1 March 1998, the balance of indebtedness related to credits granted by commercial banks in the national currency of Ukraine and in foreign currencies amounted to UAH 7,395.6 mln.

The balance of deposits of the public in the national currency with Ukrainian commercial banks was up 5% during January-February 1998. As of 1 March 1998, this balance amounted to UAH 1,693 mln, including UAH 714 mln of deposits with the Savings Bank of Ukraine.

As of 1 March 1998, there were 227 commercial banks in Ukraine, including 2 state-owned banks. Out of the 22 banks with foreign interest, 6 were with 100% foreign interest.

Since 18 March 1998, the NBU established a new discount rate at the level of 41% and a lombard rate at the level of 45% per annum.

The overall amount of international credits of Ukraine (monetary gold exclusive) as of late February 1998 was $2,057.7 mln USD; the reserve in monetary gold was 0.0617 mln troy ounces.


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