Former Prosecutor General Ruslan Riaboshapka has claimed that Ivan Bakanov, the head of the SBU, is obstructing cases that are looking into alleged fraud at PrivatBank. The leadership of the State Security Service of Ukraine (SBU) is blocking key examinations in cases that are attempting to investigate the alleged theft from PrivatBank, Riaboshapka wrote in a column for the Ukrainska Pravda newspaper. In 2016, PrivatBank was nationalized and a $5.5 billion hole was found in its ledgers. The bank and the Ukrainian government claim former owners Ihor Kolomoisky and Hennadiy Boholyubov stole the money while the accused deny all wrongdoing.
The former top prosecutor, who was fired in an extraordinary vote of the Ukrainian parliament on March 6, wrote: “Another important result for Ukraine can be quickly completed as soon as the president’s friend, the head of the SBU, unblocks… a key examination in one of the NABU PrivatBank cases. For several months now, an expert examination blocked by the SBU leadership has been saving the organizers of the billion-dollar scheme from being reported for suspicion.” Speaking at the parliament shortly before he was to be replaced, Riaboshapka said that he believed he was being fired because of his independence, productivity, and because of his intention to go after what he had called “untouchable” cases in Ukraine.
Riaboshapka is not the only law enforcement official to blow the whistle on alleged political interference in Ukraine’s law enforcement and criminal justice system. In February, Liga.net reported that the head of the National Anti-Corruption Bureau (NABU), Artem Sytnik, stated that the Bureau “did not feel fruitful cooperation” in the investigation of the PrivatBank case. Riaboshapka had also admitted that former high-ranking officials may be involved in the alleged $5.5 billion pyramid scheme at PrivatBank.
Ukraine will receive 600 million euros from the EU unconditionally and the same amount after complying with conditions, an envoy to the EU has said. The macroeconomic aid of 1.2 billion euros that the European Commission has proposed to Ukraine will be disbursed in two installments, Ukraine’s envoy to the EU Mykola Tochytsky told Interfax-Ukraine in Brussels on Wednesday. The first tranche will be allocated unconditionally, immediately after adoption by the European Parliament and the Council of the EU, and the next will be extended under some specific conditions, which the EU and Kyiv will begin negotiating in the near future.
Tochytsky said: “The first tranche of EUR 600 million will be provided unconditionally and the second upon Ukraine’s compliance with criteria to be agreed upon with Kyiv within the next few months.”
The number of families with overdue loans has increased in Ukraine as a result of the ongoing COVID-19 crisis. The problem is growing, the National Bank of Ukraine has said. The share of loans with payments overdue by more than a week has increased by 4.3% in the days from early March to mid-April. More data is contained in a weekly review of the state of banks published by the National Bank on April 22 following a survey of 21 of the country’s largest banks.
Investment in Ukrainian IT companies through 2019 amounted to more than $500 million, a new report shows. Investments grew by 1.5 times last year when compared to 2018 to pass half a billion dollars, according to a report by the Ukrainian Association of International Investors (UVCA). UVCA noted steady investment growth in the Ukrainian tech market over the past few years. Compared to 2015, the amount of investment has grown almost four times from $132 million that year.
A total of 115 transactions were concluded in 2019 according to the UVCA, and as reported by Liga.net. This indicator has not changed much since 2018, but the values have increased as companies have gotten bigger. In 2018, 111 deals were made but of slightly smaller value. The average transaction amount in 2019 was $ 5.7 million. Ukrainian software companies and online services with strong ties to the U.S. such as Gitlab, Promo Republic, Grammarly, and Platform.ai have tallied $420 million in investment only by themselves.
Fitch has downgraded Ukraine’s outlook to Stable from Positive and affirmed its rating at B. The ratings agency blamed COVID-19 as it revised its Outlook on Ukraine’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to Stable from Positive.
Fitch Ratings said in a statement: “The revision of Ukraine’s Outlook to Stable reflects the significant impact of the COVID-19 pandemic… The heightened macroeconomic and fiscal risks associated with this unprecedented global shock will partially reverse Ukraine’s improvements in recent years in terms of a declining debt burden, the normalisation of growth prospects after the 2014-2015 geopolitical and economic crises, and reduced growth volatility,” Fitch said.
Industrial production in Ukraine in March 2020 decreased by 7.7% compared to March 2019, while in February the decline was 1.5%, in January 5.1%, in December 2019 also 7.7%, the State Statistics Service has said.
The National Bank of Ukraine (NBU) bought about $600 million for reserves in April, while net sales have amounted to $800 million since the beginning of the year, Oleg Churiy, the deputy governor of the central bank, has said, as reported by Interfax. “If to count from the beginning of the year, net interventions are less than $800 million. After the crisis had subsided and the excitement disappeared, the NBU managed to buy more than $600 million for its reserves since the beginning of this month,” he said during an online briefing.
The NBU has cut its key policy rate from 10% to 8%, the Bank said in a statement on Thursday. “Together with other measures taken by the NBU, such as expanding its set of liquidity support tools and the introduction of preferential terms for borrowers by banks, this will provide the economy with the impetus required to provide support for households and businesses in these difficult times, and to ensure that business activity picks up quickly once the quarantine is lifted,” the NBU said, adding that it expects that the key policy rate to be reduced further, to 7% in the current year.
The NBU has also negatively revised its outlook because of COVID-19, predicting the deficit in Ukraine’s consolidated balance of payments could be $1.1 bln in 2020, while FX reserves could expand to $27.2 billion. The NBU has worsened the forecast of the balance of payments in 2020 to a deficit of $1.1 billion from a surplus of $3.2 billion, but expects its surplus to be restored as early as 2021.
The surplus will be $600 million next year, according to the central bank’s macro-forecast updated on April 23, (the previous estimate was $1.6 billion), and in 2022 some $1.3 billion ($400 million). The NBU also worsened the forecast of international reserves at the end of 2020-2022, but they will be higher than at the end of last year.
