The Business Week for the week of March 9 – 15, 2020

The Business Week for the week of March 9-15, 2020


The National Bank of Ukraine has decided to cut the key policy rate to 10% per annum, according to the central bank’s press release. The NBU continues its monetary policy easing to support economic growth amid declined consumer inflation during the beginning of this year, says the report. “The faster disinflation was driven by the sustained effects of last year’s hryvnia appreciation on prices of goods, large supplies of the majority of raw foods, and lower energy prices. These factors offset the effect of robust consumer demand, which was bolstered by the continued growth in real household income,” reads the report. The NBU expects to cut the key policy rate to 7% by the end of 2020 due to the country’s macroeconomic improvement and reforms in the banking sector since 2014. A decreased policy rate is a major boost for Ukraine’s economy as it makes loans more affordable.

Ukraine’s electronic money market more than doubled in 2019.

Ukraine’s electronic money market is on the rise as the volume of electronic money released in Ukraine in 2019 increased by 2.5 times year-over-year, reaching UAH 203 million, according to the National Bank of Ukraine’s Facebook page. During the same period, the volume of operations using electronic money increased 2.3 times, to UAH 16.7 billion. In addition, the number of digital wallets increased to 74 million, an 18% increase compared to last year. On February 28, Ukraine’s central bank participated in an international conference on central bank digital currencies that brought together representatives of central banks from fifteen countries including Canada, Sweden, Finland, Germany and Japan. During his opening speech, Ukraine’s central bank governor Yakiv Smolii said: “In the year 2020, the existence of digital currency is beyond question. Digital currencies are a fact of life. The only question that remains is who will do it, and when.” 

Ukraine’s central bank sold $270 million.

The National Bank of Ukraine sold $270 million on the interbank forex market on March 10, the central bank wrote on its Facebook page. With $26.8 billion in international reserves – the highest since November 2012 – the central bank has sufficient resources to mitigate hryvnia exchange rate fluctuations. Altogether, Ukraine’s money market conditions remain stable as the banking system maintains a sufficiently high level of liquidity, with some UAH 230 billion in hryvnia liquidity and over $8 billion in foreign exchange liquidity, according to the central bank. “The banks thus have enough money that they would be able to operate without interruption even if consumer and business sentiment worsened as a result of negative headlines coming in from the global markets,” reads a statement by the NBU.


Ukraine’s IT industry raises $544 million in investments in 2019.

Ukraine reached a record-breaking $544 million of total deals and investments in its IT industry in 2019, according to Ukrainian venture firm AVentures Capital’s annual overview of the tech investment industry. For the first time in Ukraine’s history, total investments in the tech sector surpassed the $0.5 billion benchmark. More than 75% of the amount was raised as late-stage funding rounds by three companies: Grammarly (more than $1 billion valuation), GitLab ($2.5 billion valuation), ($0.5 billion valuation). Ukraine’s IT industry is one of the best in the world as the country continues to attract such big names as Google, Amazon-owned Ring, Reddit, Viber and Samsung for their tech development. Hundreds of startups pop up each year as the IT industry has an increasing share of the overall economy.


Record 255,000 square meters to go on the market in Kyiv in 2020.

A record 255,00 square meters are to go on the market this year – double the amount of last year – reports CBRE Ukraine. The real estate consultancy firm projects that similar volumes of new office space will go on the market in the following two years as well. The annual take-up totaled 170,000 square meters with the IT, high tech and telecommunication category representing 44% of the total absorbed area. The manufacturing, industrial and energy sectors represented 25%, co-working and serviced offices made up 12%, and banking and finance made up 9%. The report says that the shortage of quality office space in Kyiv reactivated development, with a new supply increasing by 70% year-over-year in 2019.

Sotheby’s International Realty opens its first office in Ukraine.

U.S. luxury real estate brand Sotheby’s International Realty announced that InRealtyOU is the newest member of its global network and will now operate as Ukraine Sotheby’s International Realty, according to the company’s press release on March 9. This addition marks the brand’s first affiliated office in Ukraine. Ukraine Sotheby’s International Realty is owned and operated by Zans Launags and will serve the luxury residential real estate market in the country’s three largest cities – Kyiv, Odesa and Lviv. The company’s office will be headquartered in Kyiv. “Ukraine offers diverse cultural influences, popular summer destinations and a rich heritage,” said Philip White, president and chief executive officer of Sotheby’s International Realty. The real estate company has a network of more than 23,000 affiliated independent sales associates located in 1,000 offices in 70 countries and territories worldwide. In 2019, the brand achieved a record global sales volume of $114 billion. 


British rock band Coldplay films music video in Kyiv.

British band Coldplay filmed a music video for their song “Trouble In Town” in Kyiv using the services of award-winning Radioaktive Film, a leading film service production company in Ukraine for over 20 years. Ukraine, in general, has been a booming location for the global filming industry, as the country’s top-notch talent and affordable prices make it an attractive alternative to Hollywood. Ukraine’s multi-million filming industry is becoming a competitor within the region and can easily be on par with such traditional filming locations as Budapest and Prague. Dozens of world-famous musicians had their music videos shot in Kyiv in the past few years, whereas HBO series “Chernobyl” and the movie “Death of Stalin” were also recently shot in Ukraine. 


Ukraine increases poultry exports by 4.2% in January-February.

Ukraine increased its exports of poultry by 4.2% reaching 66,270 tons at $82 million during the first two months of 2020, according to the State Customs Service of Ukraine. Pork exports amounted to 364 tons, or 3.2 times more than during the same period in 2019. In general, the country increased its exports of poultry by 26% reaching 414,490 tons in 2019. Ukraine’s agriculture industry continues to expand as it further develops its traditional sectors, discovers new markets and innovates niche products. Overall, Ukraine’s association agreement with the European Union that was signed in 2014 has been a major catalyst in developing Ukraine’s agriculture sector as the country’s political-economic strategy has reoriented toward the West.


Kharkiv International Airport increases passenger traffic by 57% in February.

Ukraine’s Kharkiv Airport increased its passenger traffic in February by 57% to 103,400 people year-over-year, according to the airport’s Facebook page. The total number of departures was 421 domestic and international flights with the most popular destinations being: Istanbul (Turkey), Sharm El-Sheikh (Egypt), Boryspil (Kyiv), Vienna (Austria), and Poland’s cities of Krakow, Warsaw, Katowice, Gdansk, Wroclaw and Poznan. Overall, the airport’s passenger flow in 2019 went up by 40% year-over-year reaching 1.3 million passengers. Ukraine has been investing into its airport infrastructure as it is making it easier for both Ukrainians and foreigners to fly throughout Ukraine and internationally. Kharkiv’s bustling population has almost reached 1.5 million people. 


ArcelorMittal Kryvyi Rih continues its environmental improvement investing millions of dollars.

Ukraine’s largest steel manufacturing company ArcelorMittal Kryvyi Rih has continued the implementation of a large-scale investment project on the reconstruction of its Sinter Shop No. 2, according to a recent press release. The overall project cost exceeds $170 million with the purpose to reduce emissions of dust and gases, increase technical reliability of equipment and the shop’s capacity. So far the company has reconstructed 3 out of 6 sinter machines. ArcelorMittal Kryvyi Rih is part of the global steel and mining giant ArcelorMittal Group which is based in Luxembourg. The company’s integrated activity covers the entire production chain of steel production. The Ukrainian branch has been present for 15 years since the company was bought for almost $5 billion.