The interbank FX market situation remains stable due to large inflows of foreign exchange proceeds from    grain and sunflower oil exports, which have been recorded since mid-September.  We expect this factor to continue to play a key role in shaping  FX market conditions until the end of the year.        

At the same time, several short-term factors are expected to be at play in shaping foreign exchange market conditions.

First, the business day on 11 November 2016 coincided with Election Day in the US, which is  a public holiday.  During such periods, the FX market experiences an excess demand for foreign currency for one or two days resulting from shortages in  foreign exchange receipts that are entered to the accounts of Ukrainian banks

Second, last week’s escalation in political tensions have triggered   higher psychological  pressure on the FX market.

However,   these factors are expected to be short-lived and will not trigger the volatility of the hryvnia, which would be inconsistent with meeting the inflation targets  (12 +/- 3%  for 2016 and 8 +/- 2% for 2017).