The National Bank of Ukraine (NBU), which has been maintaining the official hryvnia exchange rate of UAH36.5686/$1 since the end of July 2022, will switch to a managed exchange rate flexibility regime from October 3, according to a statement on the regulator’s website.

“Under this regime, the official rate will be determined on the basis of the rate for transactions on the interbank market, and will not be set prescriptively by the National Bank in accordance with resolution No. 18 of the NBU board, as has been the case since February 24, 2022,” the NBU noted.

The central bank indicated that by compensating for the structural deficit, the exchange rate on the interbank market would be able to both rise and fall, reacting accordingly to changes in the balance of supply and demand in the foreign exchange market.

“In addition, the National Bank will significantly limit exchange rate fluctuations, preventing both the significant weakening of the hryvnia and its significant strengthening,” the regulator emphasized.