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NBU Deputy Governor Oleg Churiy Comments on the FX Market

14 February 2018

Press Release


Strengthened hryvnia exchange rate observed in the last few weeks confirms that adverse seasonal factors dominating through December to January and contributing to temporary depreciation of hryvnia have been replaced by more favorable factors resulting since the end of January in an increased FX supply from customers alongside a decreased FX demand on the interbank market.


First, FX inflows advanced from non-residents that take part in auctions held by the Ministry of Finance of domestic government bonds in hryvnia. Since the beginning of the year, the share of domestic government bonds in non-resident portfolios more than doubled, from UAH 5.1 billion to UAH 12 billion. Second, agricultural companies show signs of FX supply recovery after the seasonal drop in January. Third, sustained favorable global price conditions in metals industry contributed to a high FX supply. Besides, FX market was affected by improved depreciation expectations and an increase in FX supply from customers on the FX cash segment of the market since the second half of January associated with the gradual strengthening of the hryvnia exchange rate. In particular, net FX supply on the cash market in January increased to USD 257 million, an all-month high since July 2017.


The NBU notes that after converting to the floating exchange rate of hryvnia in 2015 these changes in exchange rate trends are characteristic of the Ukrainian FX market predisposed to certain seasonality. Previous year shows that the impact of temporary adverse factors at the beginning of the year is typically alleviated during the remaining year, which is what we are currently observing.

Last modification   14.02.2018