16:49 17.08.2018

NBU sells $526.6 mln on interbank market in Aug to prop up hryvnia

2 min read
NBU sells $526.6 mln on interbank market in Aug to prop up hryvnia

 The National Bank of Ukraine has sold $526.6 million on the interbank forex market from July 30 to prop up the hryvnia.

In particular, it sold $215 million this year and is ready for further interventions to prevent considerable forex rate fluctuations, the regulator said on its website.

"The supply of foreign currency from the main export industries (mining, metallurgical and agro-industrial complexes) remains at a fairly high level, which indicates that there are no fundamental reasons for depreciating the hryvnia. At present, there is an increase in demand for foreign currency on the interbank forex market due to seasonal, situational and psychological factors, "the report says.

Accordingly, the NBU maintains an active presence on the market to smooth excessive fluctuations of the hryvnia's forex rate, which intensified this week due to the further excess of demand for currency over its supply.

"To eliminate the imbalance on the interbank forex market, formed under the influence of certain factors, the National Bank this week conducted interventions to sell foreign currency. In total, it sold $215 million, including $24.8 million at a forex sale auction on Friday, which met demand for the currency," the central bank said.

Moreover, the NBU continues to closely monitor developments on the forex market and is ready to continue currency sale interventions, if necessary.

However, pursuing flexible forex policy, the central bank smooths only those significant fluctuations that are caused by situational factors.

"If the factors that have developed in the economy require a weakening or strengthening of the national currency, then it must move in the right direction, and the NBU does not stop that movement. The central bank's task is not to keep the hryvnia rate at a certain level, but to reduce the intensity of its fluctuations and prevent deterioration in expectations and the emergence of risks to achieve the inflation goal," it said.

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