Photo: NBU Press Center
The National Bank is ready to promptly take additional measures to stabilize the market
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Since the beginning of the year, non-resident investors in government bonds have sold bonds totaling over UAH 5 billion and bought foreign currency worth $264 million.
The main reason for the sharp weakening of the hryvnia in January was the psychological factor associated with geopolitical events around Ukraine and the reaction of market participants to them. This was stated by Deputy Chairman of the National Bank Yuri Gelety, reports economic truth on Tuesday, January 18th.
“There has been an increase in demand for foreign currency from non-residents in the foreign exchange market of Ukraine. In particular, non-resident investors in government bonds have sold bonds totaling more than 5 billion hryvnia since the beginning of the year and bought foreign currency in the amount of $ 264 million,” Heletiy said.
According to him, such a volume of additional demand had certain consequences for the situation in the domestic foreign exchange market, since it was connected with the action of certain seasonal factors. In particular, the traditionally active budget spending in December had a certain impact on the overall market situation. In addition, traditionally in January, there is a certain decrease in foreign exchange sales by agribusiness enterprises. At the same time, the volumes of currency sales from another leading export industry – mining and metallurgical industry – remain at high levels and do not yet show signs of decreasing.
Heletiy assured that currently the Ukrainian foreign exchange market “has a reliable macroeconomic basis, and is also significantly resistant to shocks.”
“The experience of a stressful situation in the spring of 2020, provoked by the COVID-19 pandemic, as well as a restrained market reaction to the concentration of troops by Russia near the border with Ukraine in April 2021, adds to the greater stability of the market,” he noted and added that in the NBU forecasts, starting since 2014, the risk of an escalation of the military conflict has been constantly taken into account.
Gelety said that as of the morning of January 18, the National Bank sold $581 million on the market. And the cash volume of foreign exchange reserves is more than $30 billion.
“If situational factors increase the threat of ensuring the stability of the monetary unit of Ukraine and / or financial stability in the longer term, the National Bank is ready to promptly take additional measures aimed at stabilizing the market, using a set of monetary instruments provided for by law,” he concluded.
Recall today hryvnia collapsed to a yearly low to the dollar – 28.41 UAH/USD. The National Bank lowered the hryvnia exchange rate by almost 29 kopecks against the US currency.
And last week NBU increased the sale of foreign currency by 3.3 times – up to 330 million dollars – to maintain the hryvnia exchange rate.
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