“At present, the foreign exchange market is balanced, last year’s devaluationary expectations have not proved correct,” said Director of the NBU Department of Foreign Exchange Reserve Management and Open Market Transactions Oleksandr Dubikhvist at the 2nd International Conference on: “Treasury: Management of Assets/Liabilities and Liquidity in Banks ”, which was held on 23 March 2012.

The foreign exchange earnings from export transactions and foreign exchange inflows under the financial account appear to be sufficient. Therefore, the National Bank of Ukraine did not carry out interventions in the foreign exchange market in order to stabilize the exchange rate of the hryvnia.

“However, the foreign exchange liquidity imbalance can still be felt in the financial market when foreign exchange deposits of clients grow at a faster pace than the loan portfolio in the foreign exchange. It results in a surplus of foreign exchange resources and a shortage of hryvnia resources. Therefore, the National Bank of Ukraine takes measures by using only economic instruments to encourage banks to attract national currency deposits, as evidenced by recent changes in the procedure for forming the required reserves by banks,” said Oleksandr Dubikhvist.

Oleksandr Dubikhvist outlined the mechanisms for operation of the T-bill market in his speech, pointing out that foreign currency-denominated T-bills are an instrument enabling banks to place free foreign exchange funds and, if required, obtain hryvnia resources from the market or the National Bank of Ukraine against the collateral of these T-bills.