The key factors that had a bearing on the operation of the foreign exchange market in 2014 and instruments to hedge foreign exchange risks were the main issues that Serhii Ponamarenko, Head of the Office for Foreign Exchange Operations and Financial Markets Analysis of the National Bank of Ukraine, addressed in his speech delivered to the participants in the 7th Ukrainian Pharmaceutical Forum.

"In order to ensure efficient communication with sectoral commercial agents and facilitate addressing the problems faced by exporters and importers operating in the pharmaceutical market, Serhii Ponomarenko briefed the Forum participants on the key factors that had an impact on the hryvnia exchange rate against foreign currencies in 2014, and available instruments to hedge foreign exchange risks. According to him, these factors include the economic imbalances built up in previous years, unfavorable external environment, trade war with Russia, damaged manufacturing facilities and disrupted trade ties as a result of external aggression, as well as psychological factors. With regard to instruments to hedge foreign exchange risks, Serhii Ponomarenko put an emphasis on the possibility to use forward and future contracts, domestic sovereign bonds denominated in foreign exchange, indexed value bonds, and non-deliverable forward (NDF).

He also noted that the decision to relinquish the policy of maintaining a fixed exchange rate and switch to a flexible exchange rate regime, and going forward, – to the inflation targeting framework, means that the exchange rate will cease to serve as the "anchor" of the economic policy, which is viewed to be something unchangeable. "The baseline forecast suggests that the exchange rate will fluctuate, but this does not mean devaluation. Therefore, the risk arising from changes in the exchange rate should be hedged," stated Serhii Ponomarenko.