Ukraine continues to adhere to the managed exchange rate flexibility regime.
The National Bank of Ukraine will continue the policy of managed flexibility, but it is too early to return to the floating exchange rate. At the same time, the NBU will avoid abrupt changes in the hryvnia exchange rate to the dollar.
The head of the department, Andriy Pyshny, announced this on Facebook.
“We should not expect any radical changes in our exchange rate policy. We remain in the regime of controlled exchange rate flexibility. In our opinion, this regime is optimal, given the permanent structural deficit of currency. Although we always note that controlled exchange rate flexibility is an intermediate format, it is definitely too early to talk about the transition to a full-fledged floating exchange rate,” he wrote.
The NBU's exchange rate policy will continue to be aimed at maintaining a stable and controlled situation on the foreign exchange market.
“This is important for the NBU to achieve its key objective of maintaining inflation at a moderate level this year and returning it to the 5% target in the coming years. To this end, the NBU will maintain an active presence on the market: to compensate for the structural deficit of foreign currency and protect the exchange rate dynamics from sharp movements. This will contribute to moderate fluctuations of the hryvnia in both directions (both towards weakening and strengthening) both over relatively short and longer time periods, depending on changes in market conditions,” Pyshnyy added.
Earlier it was reported that September showed stability in the hryvnia exchange rate against the dollar, despite seasonal fluctuations in supply and demand. Thanks to the efforts of the NBU, significant devaluation risks were avoided.
According to Yuriy Krokhmal, Head of Treasury Products Sales at Bank Avangard, a traditional seasonal revival of the foreign exchange market is expected in October. This will primarily occur due to large volumes of supply and demand.