In NBU assure that control of the situation with the fall of the hryvnia and made predictions for the spring and summer

Over the last few months the national currency is constantly devaluing the currency market. However, the Bank claim that the threat to the national currency no.

“There is no threat of the national currency, the situation is under control of the NBU, it also keeps track of the NBU Council, which defines the Main principles of monetary policy. Fundamental factors for the devaluation of the hryvnia in the present. However, if we analyze the dynamics of the exchange rate of hryvnia to the U.S. dollar in recent years, the current situation on the currency market of Ukraine issued the traditional, because there is a clear seasonality with the peaks of the exchange rate dynamics of hryvnia depreciation in January-February,” – said in Facebook, the Chairman of the NBU Council Bohdan Danylyshyn.

Also on the foreign exchange market is influenced by seasonal factors.

“This relates primarily to the contraction in the supply of foreign currency on the domestic market due to low volumes of foreign exchange earnings of exporters of Ukraine, including due to the fact that they prefer to Deposit their funds in foreign currency abroad. On the demand side, there is a high demand for foreign currency was recorded, in particular, on the part of the gas traders and enterprises of the fuel and energy complex. As a consequence, in December and January there was a revival of demand for cashless foreign currency”, – explained he.

Also in anticipation of the currency appreciation it began to buy up the population.

“However, the population continues to sell more currency than buy, spending thus their savings for consumption purposes. At the same time, the majority of opinions agree that as a year earlier fundamental factors for the deployment of devaluation processes do not exist”, – said the Chairman of the NBU Council.

On the devaluation of the hryvnia has also affected the budget and monetary factors. Last year, like the year before, the government has implemented significant public spending. In particular, at the end of the year paid pensions just over two months – December and January.

“So, in the first 11 months of 2017, the monetary base decreased slightly, while taking into account December, its growth amounted to 5.4%, or 17.5 billion UAH. Extension hryvnia offers stimulated an increase in demand for foreign currency. However, note that under appropriate conditions the hryvnia liquidity can quickly be converted into the currency market. Therefore, weights should not overlook the impact of fiscal and monetary factors on exchange rate and inflation and to take further measures to improve tactical coordination of fiscal and monetary policy,” – said Danylyshyn.

To smooth the situation on the currency market, the national Bank bought and sold dollars.

“The purchase of National Bank of foreign currency measure is justified from the point of view of the need to replenish international reserves and the specified volume of NBU’s interventions is relatively small and it was not the main factor which has set a trend. However, you cannot deny the fact that it reduced the supply of foreign currency in the market”, – noted he.

The Chairman of the NBU Council have identified the objective and subjective causes of the depreciation of the hryvnia on the currency market.


– Negative trade balance is increasing for 11 months in 2017 the negative balance of foreign trade in goods amounted to 5.2 billion dollars. It is 124 per cent more than the same period in 2016. The pace of import growth during this period compared to the same period last year (27,5%) exceeded export growth (20.6 per cent). That is, the demand for currency, which was formed as a result of significant excess of imports over exports led to the depreciation of the hryvnia.

– Over-expenditure of budgetary funds at the end of the year if as of December 1, 2017, the Fund balance of the government in a Treasury single account (TSA) opened in the state Treasury, amounted to 54.1 billion UAH, as of January 1, 2018 – 5.1 billion UAH. That is, in December the balance of the government in the TSA decreased by 49 billion. (or 10.6%). A certain portion of funds came to the foreign exchange market, contributing to a substantial increase in demand for foreign currency.

– Seasonal temporary reduction of exports (primarily of ferrous metallurgy products, chemicals and agricultural products) coincided with the situational activation of imports (especially in December) is a vector of the cumulative impact of these two factors also influenced the depreciation of the hryvnia.

– Failure to receive in 2017 two (of four planned in accordance with the Memorandum, which was signed in 2016) tranche of loans from the IMF (in 2017 Ukraine received from the IMF, $ 1 billion, and returned on previously obtained loans of 1.27 billion dollars) and ambiguous prospects of further credit cooperation with the Fund, and failure to receive 600 million Euro macro-financial assistance from the EU – as a result, the national Bank has very carefully to spend international reserves to smooth fluctuations in the hryvnia (in 2018-2021, the average annual payments on public debt amount to $ 7 billion).


– Some market players, with the objective factors, as well as having the experience of last year (in January 2017) the temporary depreciation of the hryvnia, took advantage of the situation and contribute to a temporary decrease of the hryvnia exchange rate (that is, conduct speculative operations).

“Increasing exports of agricultural products (February-March), while maintaining relatively favorable situation in the market of metallurgical products and the seasonal growth of demand for it (March-April) is expected to stabilize the hryvnia exchange rate (a possible scenario with the strengthening of the national currency in late spring – early summer)”, – predicts he.

Also “significantly contribute to exchange rate stability, the resumption of Ukraine’s cooperation with the IMF and receive macrofinancial assistance from the EU. I hope that after the meeting of President of Ukraine Petro Poroshenko and the head of the IMF Christine legard Ukraine intensifies pregovori process with the IMF and the next tranche of the IMF Ukraine will be able to obtain before the summer“.

About the state of the currency market of Ukraine the NBU Council decided to hold a separate meeting on 30 January.

  • currency
  • dollar
  • national Bank
  • Danylyshyn
  • exchange rates

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