NBU refuses to tighten reserve requirements for corporate deposits
Members of the Monetary Policy Committee (MPC) of the National Bank of Ukraine (NBU) at a meeting on March 15 refused to tighten reserve requirements (RR) for corporate deposits, in particular, to equate the required reserve requirements for corporate deposits that have up to three months' maturity to the requirements for corporate funds accumulated on current accounts, the press service of the NBU said on Monday.
"The discussion participants unanimously supported the proposal to equalize the RR for retail deposits that have up to three months' maturity with the RR for households' funds in current accounts… Several MPC members offered to extend this approach to the RR for corporate deposits in order to further tie up the banking system’s liquidity and prevent foreign currency from leaving Ukraine. But other participants did not endorse this proposal," the NBU said in the press release.
Corporate deposits are meant to be used for running a business, not for earning interest from a bank, one of these MPC members said. The banks are already competing more actively for corporate deposits and offering them even better terms than to households, he said.
One of the MPC members proposed to apply a preferential RR rate to deposits with at least one month's maturity, as short-term profitable deposits are what interest depositors the most. Tying up free funds even for a month will be sufficient to reduce risks, this MPC member said. But this idea garnered no support from other participants in the discussion either.