OREANDA-NEWS. On 02 March 2009 the NBU's acting head Anatolii Shapovalov announced that the regulator will provide around UAH 8bn to refinance 20 commercial banks. The details of the refinancing were not disclosed, while Mr. Shapovalov stressed on the importance of the collateral provision to receive the loan.

Millennium Capital sees the news to be insignificant to the banking sector, since the refinancing is not large enough (1.8% of total banking sector corporate and retail deposits as of 01.01.09) for the commercial banks to redeem the short term liabilities, but the measure could temporarily support the above 20 banks. Meanwhile, the amount of refinancing is expected to increase the monetary base by more than a half of the amount forecasted by the NBU in 2009 Monetary Policy Fundamentals. Moreover, the announcement on the importance of collateral provision may stimulate the commercial banks to buy domestic government bonds, which may have further inflation and devaluation effects.

Millennium Capital is an integrated financial services provider. Established in 2000 by a group of professionals with solid background in securities and corporate finance, Millennium Capital is now one of the major investment banking institutions.