Following the foreign exchange intervention conducted by the National Bank of Ukraine, the situation in the FX market remains stable. With the news about the nationalization of PrivatBank sending jitters across the FX market early in the week, the hryvnia exchange rate came under pressure early in the week. However, the situation in the FX market has returned to normal.

Overall, the FX market continues to benefit from favorable fundamental market factors. The supply of foreign currency remains high owing to further inflows of FX proceeds from grain exports. The favorable external price environment for Ukrainian export commodities, particularly steel and iron ore, is yet another contributing factor.

However, should temporary factors come into play in the FX market, the NBU is prepared to smooth excessive exchange rate volatility.  As a side note, Ukraine’s international reserves currently amount to USD 15.4 billion.  This amount is  sufficient for foreign exchange sale interventions  and enable the  NBU and the Government to settle their foreign debt obligations.