Auditor Ernst & Young criticized the NBU because of government bonds
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The company Ernst & Young, which conducted an audit of the consolidated financial statements of the National Bank of Ukraine for 2022, criticized the NBU because the authorities had to create reserves for purchased government bonds in order to prevent potential risks to the monetary credit system. This is reported by Bloomberg.
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The NBU had to reserve reserves for hryvnia government bonds worth more than $20 billion, which it accumulated in its portfolio last year, Ernst & Young said in a statement.
Soon after Russia’s full-scale invasion of Ukraine, the NBU significantly intensified the purchase of government debt.
The funding fueled tensions between the Ministry of Finance and the central bank, which urged the government to raise more funds through international markets. This also led to criticism from the International Monetary Fund, which demanded an end to this practice before concluding a financial agreement with Kyiv in March.
Read also: NBU called the “increased” amount in Ukraine due to the ban on foreigners withdrawing funds from OVHZ
In response, the NBU stated that the debt is low risk and stable due to the government’s discipline in payments and the powerful aid received from allies.
The regulator noted that there is “reasonable reason” to expect the return of funds from its government bonds on time, with almost $3.9 billion due this year.
Ernst & Young’s warning should not affect operations with different counterparties, the bank said.
Source: Ministry of Finance
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