Free liquidity

NBU and the volume formed by banks compulsory reserve requirements. Source: Calculated according to the National Bank of Ukraine [1, 6, 7]. The level of liquidity in the banking system and suggests indicators such as the ratio of liquidity in the monetary base [17]. In Ukraine, during 2007, this indicator fluctuated between 9.0-13.3% (see Chart 2). In 2008, the liquidity situation of the banking system in Ukraine has deteriorated: the figure fell from 7.1% at the beginning of the year to 3.3% in early June. Since June, the free liquidity of banks tends to rise and the beginning of October 2008 was 6.6%. For comparison, the level of free reserves of banks in developed countries is supported by the central banks steady at 1% of the monetary base. This helps to minimize the volatility of short-term rates in the market and hold them at a level adequate to the target of price stability. In the new market economies, the rate is 3-5%, and its decline in Ukraine to 1.25% at the beginning of October 2008 reflected the problem of liquidity of the banking system due to a number of internal and external macro-and micro-economic. Category: Liquidity of the banking system of Ukraine