The crowding-out effect of nbu deposit certificates on corporate lending in Ukraine
Abstract
The article examines the relationship between the volume of NBU deposit certificates and corporate lending in hryvnia over 2016–2025.
Problem statement. Following the onset of the full-scale war, the Ukrainian banking system has remained in a state of excess liquidity, yet lending to the real sector has stagnated. This raises the central question of the present study: do NBU deposit certificates crowd out corporate lending, and if so, through which channel?
Unresolved aspects of the problem. Existing literature examines the crowding-out effect predominantly through the channel of government borrowing. The Ukrainian case is distinctive because NBU deposit certificates are a voluntary instrument rather than sovereign debt. No formal econometric test of this hypothesis has been conducted on Ukrainian data, particularly over a long horizon, controlling for structural breaks.
Purpose of the article. To empirically substantiate the hypothesis that NBU deposit certificates crowd out corporate lending and to identify the specific channel of this effect under martial law conditions.
Presentation of the main material. The analysis draws on 120 monthly observations for 2016–2025. Four OLS specifications were estimated with dummy variables for COVID-19 and martial law, an interaction term, Granger causality tests, and the Chow structural break test. The findings reveal a distinctly wartime nature of the crowding-out effect: in the pre-war period, the relationship is statistically insignificant, whereas under martial law, the regression coefficient is −0.205 and the explanatory power is 87 %. The interaction term confirms that the effect intensifies specifically in wartime conditions.
Conclusions. The opportunity-cost channel has been identified as the mechanism of crowding out, distinct from the classical resource-deficit pattern. Enterprises can use NBU deposit certificate dynamics as a leading indicator of credit availability under martial law and act proactively to seek alternative financing sources.
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