The National Bank of Ukraine has approved the list of banks eligible to participate in the FX interventions to be conducted in the form of a request for the best quotation in Q4 2017.
According to the selection criteria, 20 banks that were selected based on the Q3 results and had the best overall rating among the banks involved in interbank transactions are eligible to participate in this type of FX intervention. The overall composite rating is calculated based on the individual rating scores assigned to the bank through the following three transparent criteria:
the volumes of transactions performed by the bank involving the purchase/sale of foreign currency with other market participants and the NBU (the weight in the rating included in the calculation of the overall rating stands at 50%),
the volume of transactions performed by the bank involving the purchase/sale of cashless foreign currency with bank’s customers (the weight in the rating - 30%); and
the volume of the bank's assets (the weight in the rating - 20%).
Based on the above criteria, in Q4 2017, the list of the banks that were selected to participate in the FX intervention conducted in the form of requests for the best quotation remained unchanged – like in the previous quarter, it contains the following banks:
- ALFA-BANK PJSC
- BANK FOR INVESTMENTS AND SAVINGS PJSC
- BANK CREDIT DNIPRO PJSC
- ING Bank Ukraine PJSC
- CB GLOBUS PJSC
- CREDIT AGRICOLE BANK PJSC
- OTP BANK JSC
- Oshchadbank JSC
- Pivdennyi JSB
- CB PRIVATBANK PJSC
- PROMINVESTBANK PJSC
- FUIB PJSC
- RAIFFEISEN BANK AVAL JSC
- SBERBANK PJSC
- CITIBANK PJSC
- TASCOMBANK JSC
- UКRGАZBАNК JSB
- Ukreksimbank JSC
- UkrSibbank JSС
- UКRSОTSBАNК PJSC
The NBU has conducted interventions in the form of requests for the best quotations, which was introduced since early 2017 in accordance with the NBU’s Foreign Exchange Market Intervention Strategy for 2016-2020.
In January - September 2017, the NBU has purchased a total of USD 2 million in the interbank FX market, including USD 817 million bought through interventions in the form of a request for the best quotation. Over this period, the NBU sold USD 546 million in the interbank FX market, including USD 93 million sold through interventions in the form of a request for the best quotation.
A FX intervention in such a form is carried out in the following way. First, the NBU requests banks to quote buying and selling prices for foreign currency through Bloomberg and Reuters trading information systems. After receiving bids from the banks, the NBU enters into an agreement with the bank that has quoted the best price.
An advantage of this new type of a FX intervention is that it enables the regulator to respond promptly to changes in the FX market situation, thus making it an efficient tool for smoothing out interbank FX volatility. Meanwhile, the NBU will continue conducting FX interventions in the form of both FX auctions and single-rate interventions.