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NBU's buying state bonds not foreseen in 2023 draft state budget in hope of getting funds from partners – Finance Minister
KYIV. Sept 15 (Interfax-Ukraine) – The government of Ukraine in the draft state budget for 2023 submitted to the Verkhovna Rada did not provide for its direct emission financing by the National Bank through direct buyback of government domestic bonds, Finance Minister Serhiy Marchenko said.
"There is such an option, but if we definitely receive $38 billion from our partners, we will not abuse hyperinflation and other factors, get into the pocket of Ukrainians by buying back the bonds by the National Bank, through other risks – devaluation and hyperinflation," he said.
"But such an option exists. This year we are using it because the situation is difficult. Of course, we will see how we can do without it," Marchenko added.
The monthly need in funding for the state budget deficit this year due to the war, according to the Ministry of Finance and the government, is about $ 5 billion. Part of the funds is provided by the NBU through emission financing via the purchase of government bonds. In June, due to a lack of external assistance, the NBU increased the direct purchase of government bonds to UAH 105 billion, but in July, August and September it provided UAH 30 billion each month, within the ceiling of UAH 400 billion previously agreed with the government for the whole year. As of the current moment, the NBU has already allocated UAH 315 billion in total.
Next year, the government plans to reduce the state budget deficit to less than $3.2 billion a month, relying on funding from the United States, the IMF and the EU.
The National Bank admitted that next year issue financing through the direct purchase of government bonds may still be needed, but insisted that its volume should not exceed UAH 200 billion per year.
