14:08 29.12.2016

Hryvnia devaluation not linked to nationalization of PrivatBank

2 min read
Hryvnia devaluation not linked to nationalization of PrivatBank

The devaluation pressure on the hryvnia exchange rate this week does not linked to the transfer of PrivatBank (Dnipro) to state ownership, and it is still linked to growth of demand on foreign currency, the National Bank of Ukraine (NBU) has said.

"We stress that the devaluation pressure on the hryvnia exchange rate this week does not link to the transfer of PrivatBank to state ownership. The allegation that outflow of deposits from the bank provokes large demand on the currency market is not true," the press service of the central bank said, citing Deputy NBU Governor Oleh Churiy.

He said that from December 19 inflow of funds of the public to other banks was twice more than outflow of deposits of individuals from PrivatBank. In addition, he said that the period of deposit outflow was only three days and then depositors started returning their funds to the bank. Outflow of deposits of companies was compensated by inflow of VAT refunded funds on accounts at other banks.

Churiy also said that currency sale on the cash market continues exceeding purchase: in December net purchase of currency from the public by banks totaled $34 million.

He said that support of liquidity of PrivatBank by UAH 25 billion from the regulator was partially sent to cover outflow of deposits and observe the obligatory reserve indicator by the bank, which the bank did not observe for almost one year.

The NBU said that the seasonal factors still influence the market: refunding of VAT for UAH 12.5 billion to exporters. Demand on currency grew thanks to companies that are to pay on credits pegged to foreign currency at the end of the year.

"In general, fundamental preconditions for fluctuations of the hryvnia exchange rate are absent now. Market factors are favorable for the currency market: income from exports of grains continues coming, the situation on the global ferrous and iron ore markets is favorable for Ukrainian exporters," the NBU said.

Forex reserves today total $15.6 billion.

The regulator held two auctions to sell currency this week and sold $144 million.

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