Governor of the National Bank of Ukraine Valeriia Gontareva said that today the National Bank of Ukraine had adopted a decision to intervene in the foreign exchange market and set two-way quotations at UAH 11.93/12.26 per USD 1.
According to her, the foreign exchange market is virtually in equilibrium, and an increase in the demand for cash foreign exchange reflects a lagged market response to last week's political events. At the same time, the current narrowing of the interbank market makes it impossible for the mechanism allowing the exchange rate to be set by market forces to operate at full capacity. As a result, it sends the wrong signals about the actual value of the hryvnia to the market players.
“The National Bank of Ukraine is resolute in its determination to maintain a flexible exchange rate and adopt an inflation-targeting regime. At the same time, as the regulator the National Bank of Ukraine is entitled to smooth out sharp exchange rate fluctuations that occur in the context of excessive market volatility. Moreover, the National Bank of Ukraine is set to replenish the international reserves by the end of the current year by purchasing foreign exchange, in particular, foreign exchange proceeds from agricultural exports and funds in the foreign exchange provided by foreign investors who are keen to invest them in the domestic sovereign bonds that used to pay VAT refund arrears (VAT-bonds)," said MsValeriia Gontareva.
In addition, she added that over the past three months Naftogaz of Ukraine NJSC, a large importer, had been buying foreign exchange in the market in the normal way. The foreign exchange was used to pay for reverse-flow gas supplies from Europe. Naftogaz of Ukraine NJSC had already purchased the required amount of foreign currency to pay its bills for gas consumed by Ukraine.
“If the political situation stabilizes and military hostilities end in the country, the excess demand for foreign exchange will be replaced by excess supply of foreign exchange," said Governor of the National Bank of Ukraine Valeriia Gontareva.