NBU adheres to strategy of minimizing participation in FX market
The National Bank of Ukraine (NBU) adheres to the strategy of minimizing participation in the foreign exchange market due to the balance of the latter, Governor of the National Bank of Ukraine (NBU) Kyrylo Shevchenko has said.
"Our supply and demand have been almost balanced since the beginning of the year. During the same period from January 1 to March 15, 2020, the NBU came out with interventions 34 times, in 2019 it was 39 times, and this year it was only 10. That is, the market is balanced, and we fully adhere to the strategy of gradually minimizing the NBU's participation in the foreign exchange market," he said in an exclusive interview with Interfax-Ukraine.
According to the governor of the NBU, the behavior of the population also indicates to the stability of the foreign exchange market, in particular, a significant increase in the net sale of cash and non-cash currency by the population in February ($270 million) versus the net purchase in February ($9 million).
He added that the balances of government bonds in the portfolio of nonresidents since the beginning of 2021 have grown by more than UAH 19 billion ($680 million in equivalent), but their sales of foreign currency amounted to less than 50% ($67 million), which did not create significant pressure on the exchange rate in side of the hryvnia revaluation.
Shevchenko said that the volume of FX purchases for the purpose of repatriating dividends, compared to the beginning of 2020, decreased by 34% and amounted to approximately $500 million.
"Today the market is quite well balanced. It is not our task to push it in one direction or the other. We can smooth out these fluctuations when there are excessive fluctuations," the governor of the National Bank said.
At the same time, according to him, to smooth out fluctuations, the NBU has replenished its reserves by $200 million since the beginning of the year.