Foreign investors should already think about investing in Ukraine, govt bonds – NBU governor

The achieved level of macro-financial stability, as well as the agreements and obligations that Ukraine has concluded over the past six months, give foreign investors enough knowledge to predict the sequence of actions of the National Bank, government, parliament and think about the feasibility of investing in Ukraine already at this stage, Governor of the National Bank of Ukraine (NBU) Andriy Pyshnyy believes.

"If we take all the components together, then even despite the war, I think the private sector could think about gradually starting to move towards Ukraine, given the opportunities for investment," he said in an interview with Interfax-Ukraine in Washington.

Among these components, he singled out, in particular, the financial sector strategy, corporate governance, insurance of military and political risks.

"A big program with the IMF is already reducing the field of uncertainty," Pyshnyy added.

He recalled that in the base scenario of the $115 billion program, the financial gap in financing over the four-year program horizon will be covered by a package of financial support from the countries of the donor coalition.

"It seems to me that there is already enough relevant information that narrows the uncertainty, and, therefore, taking into account this and the possibility of repatriating the earned funds. Isn't it worth investing in domestic government bonds, isn't it worth looking at the market?" the NBU governor said.

Commenting on the restrictions on repatriation of capital, Pyshnyy pointed out that it is correct to speak not of a ban on repatriation, but, on the contrary, of its gradual opening.

"The correct connotation is important. That is why we have not abandoned repatriation. On the contrary, we have opened one of the channels – the opportunity to repatriate that part of the income that non-residents earn by investing in domestic government bonds," he stressed.

According to him, this is an additional incentive to maintain demand in the domestic debt market, which is a prerequisite for refusing equity financing and will protect international reserves, replenished exclusively through international assistance, from depletion.

The NBU governor explained that the time to lift a ban on repatriation of the main amount of government bonds to non-residents had not yet come, although international reserves were at an 11-year high.

He added that the private sector, in addition to repatriation, also needs a stable macro-financial and macro-economic situation, a steady downward trend in inflation, a stable banking sector and its smooth operation, so repatriation is a necessary but not sufficient condition.

Source: www.en.interfax.com.ua