Pyshny announced the restoration of stability of the currency market.
The hryvnia exchange rate should act as an absorber of shocks formed as a result of internal and external factors.
NBU Governor Andriy Pyshnyy spoke about what will happen next with the national currency in an interview with Forbes.
“The mandate of the National Bank is price stability, financial stability, support for government policy. In that order. The hryvnia exchange rate is not determined by the IMF or the government. This is our full responsibility,” said Andriy Pyshnyy.
He recalled that almost a year ago the National Bank decided to abandon the fixed exchange rate and move to controlled flexibility. The NBU did this with the full understanding that the exchange rate should act as an absorber of shocks generated by internal and external factors.
“But if it turns from an absorber of shocks into their generator, this could level out all our achievements over the past two years. Demand and supply, a sense of currency risks should gradually return to all economic agents: business, the government, and the population,” he said.
In his opinion, devaluation makes a significant contribution to the processes associated with inflation dynamics. Double-digit inflation significantly affects the attractiveness of hryvnia assets. This is one of the strategic priorities of the NBU. This is important for the functioning of the domestic debt market, which, in particular, should play a decisive role in covering the budget deficit this year.
“The attractiveness of hryvnia assets should also encourage the Ukrainian population to keep their savings in hryvnia, and they should be protected from inflation,” he added.
Pyshny noted that since the introduction of managed flexibility, the volume of transactions without the participation of the NBU has tripled, and in some months – quadrupled. The NBU has eliminated the phenomenon of multiple rates. Now the spread between the official and retail rates is 0.3%. Last year it was 10-12%, in 2022 it was even 20-25%. This is again about reducing the zone of uncertainty.
Recall that Deputy Head of the NBU Yuriy Heletiy explained the growth of the dollar exchange rate by an increase in the structural deficit on the market due to the growth in demand.