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NBU Introduces Oversight of FX Market Indicators in Line with IOSCO Recommendations

The National Bank of Ukraine (NBU) has introduced oversight of FX market indicators in order to bring the methodology for defining, calculating, and releasing them into line with the Principles of the International Organization of Securities Commissions (IOSCO) for financial benchmarks. These are, in particular, the official hryvnia exchange rate against other currencies, the reference hryvnia exchange rate against the U.S. dollar as of 12:00 p.m.,as well as the accounting price of investment metals.   

The purpose is to strengthen investors’ and other financial market players’ trust in the Ukrainian FX market’s indicators that may be used to purchase and sell foreign currency in the Ukrainian and international markets and estimate financial results under such agreements.

The powers of the existing Oversight Committee for the Ukrainian Index of Interbank Rates, UONIA, were expanded. Considering its added functions, the Committee was renamed into the Oversight Committee for Ukrainian Money Market and Forex Indicators.

Said Committee, composed of members of the NBU and financial markets, will engage in defining, calculating, and releasing benchmarks not only for the Money Market, but also for the FX market. The Committee will draft proposals and offer solutions on improving these processes, as necessary.

Please be reminded that the NBU estimates and releases daily the official hryvnia exchange rate against other currencies, the reference hryvnia exchange rate against the U.S. dollar as of 12:00 p.m., as well as the accounting price of investment metals.

In November 2018, the Emerging Markets Trade Association (EMTA) included the official hryvnia exchange rate as calculated by the NBU into the Recommended FX and Currency Derivatives Market Practice on New Template Terms for UAH/USD Nondeliverable FX and Currency Option Transactions.

Respective amendments regarding the reorganization of said Committee and introducing oversight FX of market indicators were approved by NBU Board Resolution No.140  On Amendments to the Regulation On Setting the Official Hryvnia Exchange Rate against Foreign Currencies and Calculating the Hryvnia Reference Exchange Rate against the U.S. Dollar and Accounting Prices of Investment Metals dated 07 October 2020. It will come into force on 08 October 2020.

 

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