From the beginning of raising the discount rate to 25%, I was sure that this was a dangerous and senseless step. The transformation tool in our imperfect financial system does not work: after the increase in discount rates, banks did not increase their deposit rates. They did not believe that such nonsense could drag on for long. And then you can’t reduce the deposit rate. We have to pay.
At the same time, the NBU increased the rate on depositary certificates (an instrument exclusively for banks) to the discount level. As a result, banks received excess profits at the expense of the state and stopped lending.
Why with state budget funds? Because the excess of revenues over expenses of the National Bank should go to the budget. Paying for certificates at this level increases the NBU’s expenses by a multiple, and therefore reduces its profits.
And with lending rates at the level of 25% and above, it is very difficult for business, and banks are not interested in lower rates (there is a safe instrument of depositary certificates that does not require reserves). The rate was raised; lending (consider the economy) was killed. Banks received excess profits using state funds.
Do you think they kept it from devaluation? No. All excess hryvnia received from the state will flow into the foreign exchange market at the first opportunity. After all, this is already happening. Those who have excess liquidity in hryvnia transfer it into foreign currency. International donors will pay for it anyway. But it won’t always be like this.
Now we will take the next senseless step – we will introduce taxes on this excess profit. Instead of removing the unnecessary mechanism for obtaining this excess profit – a meaningless refinancing rate of 22% compared to inflation of 8.6%.
What will happen in the end? Banks will increase lending rates for businesses, justifying this with a new tax. There is nothing left to talk about the development of entrepreneurship in Ukraine, and now both banks and entrepreneurs will not be interested in it – there is no business other than government theft, corruption and drugs that could withstand such rates.
It will also not always be possible to cover up your actions with war.
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Moreover, as a former banker, I guarantee you that banks will not pay anything from the “interest margin”. All their interest income will be equalized so that interest income will be equal to interest expense. Banks will take the rest of the margin from the client, credited with “commission income” that is not included in this “additional taxation”. And all this nonsense will continue: banks will receive excess profitability from certificates of deposit of the NBU (think of it as the state). The state budget will receive nothing.
2023-09-09 14:30:53
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