16:06 17.03.2020

NBU spends up to $1 bln to support hryvnia since early 2020, FX reserves exceed $25 bln, enough to smooth fluctuations

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NBU spends up to $1 bln to support hryvnia since early 2020, FX reserves exceed $25 bln, enough to smooth fluctuations

The National Bank of Ukraine (NBU) has spent up to $1 billion to support the hryvnia since early 2020, forex reserves exceed $25 billion and they are enough to smooth fluctuations, Deputy NBU Governor Oleh Churiy has said.

"We have been pursuing a policy of floating exchange rate since 2015, and we are actively participating in this market, trying, first of all, to smooth out fluctuations. This is what we did in past years, and we will continue doing so in the future," he said at briefing in Kyiv on Tuesday.

Churiy recalled that last year the NBU was able to buy back almost $8 billion into reserves, and this year it uses them to smooth out fluctuations when the hryvnia is weakening, and after active interventions in support of the hryvnia in the last two weeks, since the beginning of the year, their negative balance totaled "a little less than $1 billion."

"Reserves are at a sufficient level – they are more than $25 billion. And we will continue our policy of smoothing fluctuations, because it is very necessary to maintain stability in the foreign exchange market," the NBU deputy governor said.

He said that "the National Bank sells as much currency as needed," in particular, there are no unsatisfied applications on the interbank market following the results of the day.

As for the more severe devaluation of the hryvnia in the cash market, Churiy explained it by problems with the delivery of cash currency to Ukraine in the context of transport restrictions introduced due to coronavirus COVID-19 and predicted an improvement in the coming days due to the establishment of alternative supply channels.

The deputy governor of the National Bank also said that in five working days since the beginning of the acute phase of the crisis, total demand amounted to $2.1 billion, of which the population bought about $300 million, nonresidents (who bought government bonds) – only $8 million. "Most of the currency was bought by Ukrainian companies that bought this currency to pay under import contracts, as well as for payments on debt obligations," he said.

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