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20 September 2017
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NBU presses for single exchange rate on foreign exchange market

A realistic single and effective exchange rate for Ukraine’s national currency the hryvnia should be set in the market, National Bank of Ukraine Governor Valeria Gontareva has said.

REUTERS
REUTERS

The NBU is working to solve the problem of eliminating the various different foreign exchange rates that exist on the market, and the possible introduction of new mechanisms to achieve exchange rate equilibrium, according to an NBU statement posted on Facebook following the weekly meeting on Monday of NBU officials and bankers.

Market participants expect the NBU to abandon its policy of setting indicative rates in the currency market, enabling currencies to be traded at a realistic exchange rate, with no restrictions and eliminating the "gray" and "black" markets for currency. Bankers believe that NBU’s daily target auctions to set the equilibrium rate have become purely declaratory in nature, causing imbalances between the official rates, the interbank market rate, and cash currency trading rates.

As UNIAN reported earlier, in 2014 the hryvnia almost halved in value against the dollar, hitting a new historic low of UAH 15.85 to the dollar. At the same time, the hryvnia exchange rate to the dollar on the interbank market, including commission payments, and on the  cash currency market, including pension fund fees, it amounts to UAH 21 UAH to the dollar.

In late 2014, the NBU shifted to a symbiosis of market and administrative rate regulation, setting an indicative rate for the market through daily auctions in the interbank foreign exchange market in small quantities.

At a meeting with the NBU on January 13, bank officials agreed with the regulator on maintaining the current rules for currency market operations until the end of February, when the mission of the International Monetary Fund, currently operating in Kyiv, announces the results of its work.

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