• 12/04/2024 11:47

The NBU says that Ukrainians’ trust in the hryvnia remains. Dollarization has fallen

The share of foreign exchange funds is the lowest in two decades. The level of dollarization of client funds is steadily decreasing. This is stated in the “Financial Stability Report” of the NBU.

The NBU says that Ukrainians' confidence in the hryvnia remains. Dollarization has fallen

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Decreasing dollarization

In November it amounted to 31.9%, which is commensurate with the figure before the full-scale invasion. Since that time, the share of foreign currency deposits has simultaneously increased due to the adjustment of the exchange rate in July 2022.

The long-term trend towards a reduction in the role of foreign currency funding has market prerequisites. Deposits in foreign currency remain less attractive for the population, because the profitability of hryvnia deposits is noticeably higher and compensates for the risks of devaluation.

The NBU says that Ukrainians' confidence in the hryvnia remains. Dollarization has fallen

Banking opportunities Investing in foreign currency is also extremely limited due to weak demand for loans in foreign currency and the government’s need for foreign currency attractions from the domestic market.

Therefore, moderate exchange rate fluctuations will not stop the trend toward de-dollarization unless there are significant shocks.

minfin.com.ua

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