Political tensions trigger psychological pressure on FX market: NBU
Last week’s escalation in political tensions have triggered higher psychological pressure on the FX market, Director of the NBU Open Market Operations Department Serhii Ponomarenko said in his comments over the situation on forex market Monday, November 14.
Besides, the NBU official has noted that the business day on November 11, 2016, coincided with Election Day in the U.S., which is a public holiday. During such periods, the forex market experiences an excess demand for foreign currency for one or two days resulting from shortages in foreign exchange receipts that are entered to the accounts of Ukrainain banks, reads a statement published on the NBU website.
However, these factors are expected to be short-lived and will not trigger the volatility of the hryvnia, which would be inconsistent with meeting the inflation targets (12 +/- 3% for 2016 and 8 +/- 2% for 2017), according to Ponomarenko.
Ukraine sees 1.8% GDP growth in Q3 year-on-yearThe official added that the interbank forex market situation remains stable due to large inflows of foreign exchange proceeds from grain and sunflower oil exports, which have been recorded since mid-September.
"We expect this factor to continue to play a key role in shaping FX market conditions until the end of the year," reads the statement.