There has been an excess supply of foreign currency in the interbank FX market this week resulting from the coincidence in time of the New Year holidays in Ukraine and business days in the U.S. and Europe. 

During these days, foreign exchange proceeds kept flowing via correspondent accounts held by Ukrainian banks in the U.S. and Europe and accumulated on these accounts to be sold in the post-holiday period. As a result, the supply of foreign currency on the interbank market has exceeded the demand for it this week.

With a view to preventing excessive exchange rate volatility while replenishing international reserves, on 5 January 2017,  the National Bank of Ukraine announced a FX purchase auction. The auction amount: up to USD 100 million. This week, the NBU has held two FX purchase auctions through which USD 23.8 million was purchased to replenish international reserves.