17:31 28.08.2018

VAT refunds seen as main factor behind weakening of hryvnia

2 min read
VAT refunds seen as main factor behind weakening of hryvnia

Dynamics of the hryvnia exchange rate in the interbank foreign exchange market in recent days have been determined by a temporary factor - value-added tax (VAT) refunds by the Ministry of Finance to businesses at the end of the month, Director of the National Bank of Ukraine's Open Market Operations Department Serhiy Ponomarenko has said.

"In the past three days, such payments amounted to UAH 6.9 billion. After receiving the refunds, exporters usually reduce the supply of currency on the market, as their demand for hryvnia temporarily decreases significantly," he told Interfax-Ukraine.

According to Ponomarenko, the National Bank continues to closely monitor the development of the situation on the foreign exchange market, is ready to continue to implement foreign exchange interventions in order to avoid sharp forex rate "jumps."

At the same time, he recalled that the task of the central bank is not to keep the hryvnia rate at a certain level, but to reduce its volatility, which could negatively affect the target inflation level.

"If the factors that have developed in the economy form pressure on the weakening or strengthening of the exchange rate, the rate should move in the appropriate direction, and the National Bank does not oppose this trajectory," he said.

Ponomarenko also said that the NBU had sold $422 million in the interbank foreign exchange market since the beginning of the month. At the same time, the NBU bought $16.7 million in the foreign exchange market on August 20 after the strengthening the hryvnia.

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