NBU consults Cabinet on ways to soften hryvnia devaluation

The Council of the National Bank of Ukraine (NBU) has provided recommendations to the Cabinet of Ministers on how to prevent the imbalance of the monetary market in late 2018-early 2019 and prevent the strengthening of devaluation pressure on the hryvnia due to the seasonal increase in money supply due to public spending, as it was seen in previous years.

To this end, it is necessary to immediately intensify the work on improving the quality of forecasting the dynamics of the Single Treasury Account funds, as well as ensuring regular and predictable budget payments and VAT refunds, the NBU Council said in a statement.

In addition, the Council said the State should adhere to the policy of gradual replacement of currency borrowings with those in hryvnia to reduce the exposure of state finances to forex risks and ensure their medium term stability.

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UNIAN memo. Since December 18, 2017, the Ukrainian hryvnia has been updating its minimum annual rate almost daily, approaching its historical minimum of UAH 30 per the U.S. dollar, which was reported in February 2015.

In the second half of January 2018, the devaluation pressure on the hryvnia weakened, and in late January, the hryvnia exchange rate against the U.S. dollar was set at UAH 27.84, having won back the positions lost since the beginning of the year.

The current rate of the hryvnia on the interbank forex market settled at UAH 27.96/27.98 to the dollar.