According to minutes from the latest meeting of the NBU Monetary Policy Committee (MPC), which preceded the NBU Board’s key rate meeting on Dec. 12, 7 out of 11 MPC members supported hiking the key rate by 50bp to 13.5%. Two members voted for keeping the rate flat at 13%, in line with the NBU’s earlier forward guidance, and the remaining two argued for a sharper hike, to 14%.

The outgoing administration of US President Joe Biden announced $500m in weapons and ammunition supplies for Ukraine under Presidential Drawdown Authority (PDA), reportedly its final military aid package before Donald Trump’s inauguration on Jan. 20. The package includes air defense missiles, air-to-ground munitions, and support equipment for F-16 aircraft. According to the Pentagon, the Biden administration has committed $66bn in security assistance for Ukraine since the start of Russia’s invasion on Feb. 24, 2022.

Ferrexpo reported 4Q24 pellet production of 1.5 Mt, up 18% q-o-q and 140% y-o-y, including 1.2 Mt of premium 65% Fe pellets, 164 kt of DRI pellets, and 135 kt of pellets produced from third-party ore. Quarterly concentrate production totaled 266 kt, up 108% q-o-q and 5.3x y-o-y. Ferrexpo operated two out of its four pelletizers in 4Q24, and its total quarterly production came in at 1.8 Mt, up 27% q-o-q and 161% y-o-y, bringing full-year output to 6.9 Mt, up 66% y-o-y.

Base load day-ahead (DAHD) electricity prices in Ukraine averaged UAH 5,779 (EUR 132)/MWh in December, up 10% m-o-m and 58% y-o-y, bringing the full-year average to UAH 4,522/MWh (+34% y-o-y). The average bilateral base load price on the Ukrainian Energy Exchange (UEEX) for December supplies was flat m-o-m at UAH 5,087/MWh (+31% y-o-y), or 12% below the day-ahead level. In 2024, it increased by 31% to UAH 4,289/MWh. In the first days of 2025, base load power supplies were priced higher at UAH 5,327/MWh, up 5.3% m-o-m and 42% y-o-y). Commercial power imports surged by 2.6x m-o-m and 86% y-o-y in December, to 432 GWh, averaging 0.5 GW, implying an average import capacity utilization rate of just 23%. Power exports totaled 7 GWh last month, down from 60 GWh in November but up from zero in December 2023. In 2024, total power imports surged by 5.4x y-o-y to 4.4 TWh or 0.5GW, while exports remained little changed at 366GWh or 41MW.

Ukraine’s direct and guaranteed public stood at $160bn as of end-November, rising by 2.8% ($4.4bn) m-o-m and 10% ($14bn) YTD.

The state rail monopoly Ukrainian Railways (RAILUA) announced yesterday its decision to pay coupons on its Eurobonds falling due in January, citing its improved expectations for the implementation of a freight tariff increase.

NBU gross foreign reserves rose by 10% m-o-m ($3.9bn) to a new record-high of $43.8bn in in December, up 8.1% y-o-y. The end-2024 tally was equivalent to 5.5 months of prospective goods and services imports, according to the central bank. The official exchange rate of the hryvnia to the US dollar stood at UAH 42.04:USD as of end-2024, down 1.1% m-o-m and 9.6% y-o-y.

The National Bank’s survey-based index of business activity, a PMI-type gauge, stood at 45.9 in December on a 0-100 scale, down 1.3pt m-o-m and flat y-o-y.

According to provisional data from the Finance Ministry, the central budget’s cash-based deficit widened to UAH 234bn ($5.6bn) in December from UAH 129bn ($3.1bn) in November, bringing the full-year gap to UAH 1,359bn, slightly higher than UAH 1,330bn in 2023.

The Ministry of Finance placed UAH 5.6bn ($133m) of hryvnia-denominated bonds at a primary auction yesterday.

According to Ukraine’s State Statistical Service (SSS), real GDP rose by 2.0% y-o-y in 3Q24, slowing from 3.7% in 2Q24 and 6.5% in 1Q24. The agency estimated s/a non-annualized real GDP inched up by 0.2% q-o-q in 3Q24, in line with 2Q24 but slowing from 1.2% q-o-q s/a in 1Q24. On a separate note, the SSS revised 2023 real GDP growth 0.2pp upwards, to 5.5% y-o-y, and made a larger adjustment to nominal GDP, up 1.4% to UAH 6,628bn ($181bn), as the GDP deflator was revised by 1.4pp to 19.9%.

Interpipe announced a cash tender offer to acquire up to $100m out of its outstanding $300m Eurobonds due in May 2026. The company offered to pay 90% of the nominal amount for bonds validly tendered before the early deadline of Jan. 17 and 80% for bonds tendered later but before the offer’s expiration on Feb. 3. The company may adjust the maximum acceptance amount of $100m higher at its discretion. An announcement of early tender results is expected on or around Jan. 20, with the early payment date set at or around Jan. 23. The dates for announcing final tender results and final payment are on or around Feb. 4 and Feb. 5, respectively.

Naftogaz reported 9M24 sales of $5.0bn (+11% y-o-y), EBITDA of $2.0bn (+67%) and net income of $587m (+40%), booking an EBITDA margin of 39% (+13pp y-o-y). Net operating cash flow was positive at $1.2bn, up from almost zero in 9M23. Investment cash outflow stood at $427m, vs. an inflow of $247m in 9M23, as proceeds from cushion gas sales of $338m and interest received of $105m only partially offset $617m of PP&E purchases (in 9M23, cushion gas sales were much higher at $709m). Financing cash outflow totaled $1.1bn, including $487m of repaid debt (a EUR 300m EBRD credit line and a $165m 2025 bond amortization) and a $440m dividend payout to the state. The cash position increased by 34% y-o-y to $1.7bn (yet -7.1% YTD), with most of this amount held with Ukrainian state-owned banks. Total debt fell by 8.4% y-o-y and 11% YTD to $2.6bn following the aforementioned debt redemptions, while net debt slid by 42% y-o-y and 17% YTD to $0.9bn, improving Debt/EBITDA to 1.0x, from 1.8x in 9M23 and 1.5x at end-2023, and Net Debt/EBITDA to 0.4x, from 1.0x in 9M23 and 0.6x in 2023. Additionally, Naftogaz reported 9M24 gas extraction growth of 6.7% to 11 bcm.

The NBU on Dec. 20 amended its earlier F/X liberalization resolution, permitting local companies with SPV-issued Eurobonds (LPNs) to repatriate dividends to compensate for coupon payments made between Feb. 24, 2022, and Apr. 30, 2024, using offshore F/X liquidity.

Key highlights: Russian forces remain focused on capturing Pokrovsk, but other front lines have changed only marginally. Russian territorial gains slowed markedly in December despite the intensity of Russian ground attacks hitting new highs. The Biden administration authorized $2.5bn in military aid for Ukraine on Dec. 30, bringing December assistance to $4.7bn, one of the highest tallies since 2022. A December poll showed a growing share of respondents agreeing to accept territorial concessions in exchange for peace but a slim majority still being opposed to that.

The Ukrainian Finance Ministry reported gross foreign budget support at $9.2bn in December and $41.7bn in 2024. The full-year amount included EUR 16bn ($17.3bn) from the EU, part of the $50bn 4-year Ukraine Facility program; $5.7bn from the US provided as direct budget support; $5.3bn from the IMF under a $15.4bn EFF program; $4.8bn from the World Bank (a $1.6bn US grant converted into a loan); $4.3bn from Japan (channeled via the World Bank); $1.8bn from Canada; and $1.0bn from the UK. Also, Ukraine received $1bn from the G7’s $50bn Extraordinary Revenue Acceleration (ERA) package backed by proceeds from immobilized Russian sovereign assets. This amount, provided from the US’s $20bn contribution the ERA, was disbursed via the World Bank. On a related note, the Ukrainian government and the World Bank signed an agreement on another $15bn of financing from the US’s ERA contribution. The funds will be channeled via the Bank’s Public Expenditures for Administrative Capacity Endurance (PEACE) project and go towards financing non-military budget expenditures such as salaries for public workers and assistance to vulnerable population groups.