Financial stability of Ukraine in the past months have significantly strengthened, and the tension in the banking system lowered, although the decision of the court to annul the nationalization of PrivatBank is a serious challenge, the National Bank of Ukraine (NBU) said, presenting a financial stability report in Kyiv on Tuesday.

"We record that the fundamental risks to financial stability are perhaps the lowest in the entire history: the economic conditions are favorable, the banks are liquid, capitalized, profitable," First Deputy Governor of the National Bank of Ukraine (NBU) Kateryna Rozhkova said.

"We have a key short-term challenge for financial stability – the situation with PrivatBank," she added.

Rozhokva said that the National Bank has a definite plan of action, but reiterated that the revocation of the decision to nationalize PrivatBank by Kyiv's district administrative court carries risks to Ukraine's cooperation with the International Monetary Fund (IMF) and threatens financial stability.