The hryvnia to dollar exchange rate now depends on supply and demand in the market.
The National Bank of Ukraine will monitor the exchange rate in order to reduce inflation.
This was stated by Deputy Head of the NBU Serhiy Nikolaychuk in an interview with the Center for Economic Strategy.
“The logic of our actions fits neatly into the strategy of a gradual transition to inflation targeting and easing of foreign exchange restrictions, as well as a transition to managed exchange rate flexibility, which we approved last year as a result of cooperation and discussions with our colleagues from the International Monetary Fund,” he said.
A week ago, the National Bank Council approved the principles of monetary policy for the medium term, where, in addition to approving the flexible inflation targeting regime, it also secured the principles of exchange rate policy, which remains unchanged.
The actions of the NBU on the foreign exchange market will be calibrated, as is done from the monetary committee to the monetary committee.
“At the same time, the general direction of our actions will remain unchanged. With our actions, we will continue to close the deficit of the structural deficit of the private sector currency, which we are developing in the conditions of a full-scale war. With our actions, we will help the currency market avoid excessive exchange rate fluctuations, and we will ensure with our actions that we will maintain control over both exchange rate and inflation expectations, and we will also fulfill our tasks and ensure the attractiveness of instruments in the national currency and, in fact, the exchange rate parameters,” Nikolaychuk noted.
After the expected jump in inflation at the end of this year to 8.5%, the NBU will direct its actions to reverse inflation and reduce it next year.
Recall that experts have given a forecast of what the dollar exchange rate will be until the end of 2024. It is noted that the general situation on the currency market will remain quite stable and predictable.
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