The interventions of the National Bank of Ukraine for the sale of currency this week was $200 million to smooth temporary exchange rate fluctuations, mainly caused by psychological factors, said the Agency “Interfax-Ukraine” the National Bank of Ukraine.
“The supply of currency has decreased and the demand for it increased. However, such fluctuations are not due to the emergence of new fundamental factors and is mainly caused by psychological factors,” commented the NBU in response to the request of the Agency.
The national Bank noted that, despite the favorable situation on the currency market as a whole in some periods during the year the hryvnia exchange rate also fluctuated in the direction of weakening. In particular, such situation was observed in March, then in late may – early June, after which he began a reverse trend.
The Central Bank stressed that the volume of international reserves, which in recent months is in the range of $21-22 billion, is sufficient to smooth the current fluctuations on the currency market.
“Under flexible exchange rate regime the exchange rate fluctuation is a market response to permanent changes in the economy and in the world. After a period of enhanced fluctuations the market always finds a balance point and reverses the trend,” said the regulator.
The national Bank reminded that his role on the foreign exchange market is to smooth out the significant fluctuations (both in one and in the other direction), which can be harmful to the economy.
The NBU has indicated that a favorable situation on the currency market in September allowed him to replenish international reserves of $930 million due to foreign exchange intervention by buying foreign currency. Since the beginning of this year net purchase of foreign currency amounted to about $3.7 billion, which is almost 1.4 times more than in 2017-2018 as a whole. At the same time, foreign exchange interventions of the national Bank did not oppose market trends, and exchange rate of hryvnia since the beginning of the year rose more than 10%, said the Central Bank.
It explained that opportunities to increase purchases this year due to the emergence of new fundamental factors: first, a steady inflow of funds of nonresidents in the hryvnia, the national debt and the record growth in the yield of grain in Ukraine.
“Macro-financial situation in Ukraine is quite stable. This year there has been a steady growth of exports and the inflow of investment of nonresidents in government securities in contrast to moderate volumes of imports and repatriation of dividends,” – said in response to the request of the Agency.
The NBU indicated that the pace of export growth exceeds the rate of import growth if not to take into account the statistical reporting preferential customs clearance “EuroBLECH”, successfully passed the peak of payments on external public debt in may and September, and prudent fiscal and tight monetary policy to gradually bring inflation to the target level of 5%, which, according to forecasts of the national Bank, will be reached in the next year.
As reported, during the first three days of the week the official rate of hryvnia fell by 3.2% to 24,8598 UAH/$1, returning to the levels seen in mid-September. At the same time, from the beginning, the strengthening of the national currency of Ukraine is 10.2%, and the current rate corresponds to August 2016.