The National Bank of Ukraine successfully counteracts the devaluation of the hryvnia.
Last year, the National Bank of Ukraine refused to fix the official hryvnia exchange rate to the dollar. During this time, the dollar has risen in price by almost 13% for a number of reasons.
This was stated by the head of the NBU, Andriy Pyshny, on Facebook.
“We understand that following the results of the year of managed flexibility, people will first of all take into account the devaluation rate of the official exchange rate. Thus, the official exchange rate of the hryvnia to the dollar weakened by almost 13%. This happened against the background of a combination of exogenous factors (a longer and more intense war, the destruction of the energy sector, rumors of default), the easing of monetary policy and currency restrictions by the National Bank, which was critically important for business and stimulating economic activity,” he wrote.
At the same time, such dynamics of the exchange rate, firstly, allowed to keep inflation close to the NBU target (5%) during this year, and its acceleration in August was expected and was due to factors on the supply side of food products.
Secondly, it did not delay a further increase in inflation expectations.
Thirdly, it contributed to the improvement of the state of foreign trade: the trade deficit for the first eight months of this year decreased to $22.2 billion compared to $24.5 billion last year.
Fourthly, such a weakening of the hryvnia did not delay the attractiveness of assets in the national currency.
“Over the year, the hryvnia to dollar exchange rate on the cash market, where the population buys and sells currency, weakened by 9%. Interest rates on hryvnia term deposits last year, even after deducting taxes, exceeded 12%. Interest rates on domestic government loan bonds were even higher and reached 19%,” the head of the NBU added.
Earlier, Pyshny reported that the National Bank of Ukraine will continue the policy of controlled flexibility, but it is too early to return to a floating rate. At the same time, the NBU will avoid sharp changes in the hryvnia exchange rate to the dollar.