16/01/2015 Ukraine: Daily Highlights - The head of the NBU Gontareva addressed the deputies of the Verkhovna Rada with a report on the activities of the bank.

01/16/2015 Daily Highlights by "Digests and Analytics - Ukraine" News Agency

Topics of the day

The head of the NBU Gontareva addressed the deputies of the Verkhovna Rada with a report on the activities of the bank. The intensity of the fighting in the Donetsk airport is not going down.

Key Events In Ukraine

• By the end of 2015 the European Union has become Ukraine’s major trading partner. Its share in the trade amounted to 35.5% while the CIS countries fell to the second place with 29%.
• At a meeting with leaders of parliamentary factions, President Poroshenko said that he prepared a law abolishing the immunity of deputies and judges.
• Press Service of the National Security Council announced the launch of the main situational center of the country, which is to assess the level of threats and work out solutions to localize emergencies.
• In the Verkhovna Rada, a bill was registered to amend the Constitution to recognize the Rome Statute. This opens a way to consider cases of crimes against humanity committed on the Ukrainian territory by the International Criminal Court in The Hague.
• Speaking before the deputies of the Verkhovna Rada, the head of the National Bank Mrs. Gontareva repeated the main points of her New Year's interview and said that the increase in the money supply in 2015 will be 91 billion UAH, or 27% of the current monetary base. There will be no fixed exchange rate for hryvnia. In her opinion, the exchange rate on the "black market" does not correspond to the real rate. The projected inflation rate for 2015 is 17%. The NBU discount rate may increase to a value equal or higher than the rate of inflation. Salary of seven minimum wages does not suit her.
• NBU keeps the official rate of hryvnia (UAH) steady: 15.80 UAH / USD (+0.02 UAH), 18.50 UAH / EUR (-0,08 UAH) 2.44 UAH/10 RUR (+0.07 UAH).
• State Statistics Service has reported growth in unemployment in December to 1.9%. According to experts, the real unemployment rate is several times higher.

Kyiv Life

• Adoption of the capital’s budget is scheduled for January 29th. There will be no benefits for most categories of the citizens, no funding for food service in schools and hospitals, public transportation fares will increase, and a new a tax on real estate established.

Theater of war

• Fierce fighting continues in Donetsk airport. The militants and Russian units bear heavy losses. The defenders held their territory. Shellings and attacks on Ukrainian army positions committed throughout the combat zone. The troops opened fire in response, but are taking casualties. Residential areas of towns and highways are subjected to shelling. There are victims among the civilian population.
• SBU claims that starting from January 21, a special pass will be required to get into the area controlled by the DPR and LPR. Passes will be issued by the coordination center and entrace will be possible via only 7 previously mentioned checkpoints. Turnaround time for issuing passes is 10 days. Donetsk Oblast Governor Kikhtenko urged to delay the introduction of admission by passes for a month because it was not well thought through and there is a need for careful preparation.
• The terrorist threat in the country is growing. An explosion occurred near the office of a volunteer organization in Odessa. In the Kharkiv region, unidentified persons fired from a grenade launcher on a train with petroleum products.

Ukraine and the World

• Belarus confirmed its readyness to ensure that the meeting in Minsk between Russia, Ukraine, OSCE and representatives of the terrorists takes place. However, the talks, scheduled for January 16, did not happen. A new date has not yet been agreed upon.
• US President Barack Obama and British Prime Minister Cameron agreed to press Russia with sanctions until it stops its aggression in Ukraine.
• German Chancellor Merkel discussed over the phone with the President Poroshenko questions on macro-financial assistance and measures to stabilize the economic situation in Ukraine, as well as the prospects for a settlement in the Donbass.

Trends

• The West is ready to give Ukraine a financial guarantee for repayment of previous loans but there is no talk about direct financing without serious reforms and tackling the corruption.
• "Naftogaz" reported a reduction in Ukraine’s gas consumption in 2014 by 16%. However, given the decline in industrial production by 10% and the loss of territory with about 10% of the population, the real per capita consumption might not have been reduced, indicating absence of systemic energy conservation measures.