The National Bank of Ukraine (NBU) sold $300 million in the interbank foreign exchange market on March 17, which is 26% or $62 million more than on March 16, the regulator has reported on its Facebook page.
“Today, the National Bank took an active part in trading on the interbank foreign exchange market. We sold $300 million to smooth out excessive exchange rate fluctuations. At the same time, as the floating exchange rate regime provides, we do not fix it at a certain level and do not change the trend, which is determined by the market,” the NBU said.
According to the NBU, the prevalence of demand for currency over supply is explained by the deterioration of market sentiment due to the spread of coronavirus COVID-19 disease in the world. The most active players in the foreign exchange market are Ukrainian companies, while the demand of the population and investors for currency is much lower.
The National Bank said that it has enough accumulated reserves to smooth out excessive exchange rate fluctuations caused by a psychological factor. According to the regulator, as of March 17, Ukraine’s forex reserves were about $25 billion.
The regulator said that it was not going to introduce currency restrictions and plans to continue adhering to a consistent policy in the foreign exchange market.
“We will continue both conducting foreign exchange interventions, if necessary, and fulfilling obligations on external debts,” the central bank added.
The NBU recalled that last year the situation on the foreign exchange market was favorable – the supply prevailed over demand, and to smooth out the hryvnia fluctuations in the direction of strengthening, the central bank bought almost $8 billion into reserves.
According to the central bank, last week it conducted interventions in support of the hryvnia for $981.60 million. In particular, on March 10 the regulator sold about $270 million, on March 11 $350 million, on March 12 $220 million and on March 13 $150 million.
