In the face of a sharp drop in the value of the hryvnia, Ukraine’s national currency, the country’s central bank is to sell $100 million on the interbank currency market.
The hryvnia weakened to Hr 28.75 per dollar on Jan. 13, down from Hr 27.40 during the previous week.
“Under such circumstances, the NBU is ready to intervene in the market to smooth out the excessive exchange rate volatility, which was caused by temporary factors, and it has enough instruments to address this volatility,” NBU Deputy Governor Oleg Churiy said on Jan. 13.
He said the reason for the hryvnia’s weakness was a shortage of foreign currency on the Ukrainian forex market.
The foreign exchange supply is currently lower than in previous months, which is due to the seasonal decline in economic activity that is typically seen at the beginning of the year, Churiy said.
According to him, the situation has been prompted by lower foreign exchange inflows from agricultural exports, which were the main source of foreign currency in the fall of 2016. In the meantime, metallurgy exports are gradually becoming the major source of foreign exchange inflows for the country.
Earlier, on Jan. 5, the NBU announced that it was going to buy up to $100 million due to “an excess supply of foreign currency on the interbank foreign exchange market.”
Kyiv Post staff writer Denys Krasnikov can be reached at [email protected].
