The hryvnia has strengthened against the U.S. dollar on the interbank forex market in March / Photo from UNIAN
Interbank forex quotes were UAH 26.44/26.47 per U.S. dollar by the end of trading on March 6.
The National Bank of Ukraine (NBU) says that the current favorable situation in the forex market has allowed it to replenish the country's international reserves by buying $700 million this year without affecting the hryvnia forex rate.
The NBU bought $200 million in the first week of March alone, it said on its website.
The NBU explained that the strengthening of the hryvnia exchange rate in recent weeks is due to the influence of market factors, including a favorable external pricing environment for Ukrainian exporters, due annual tax payments to the national budget, weak growth in imports of goods, low repatriation of foreign currency dividends, and excess forex sales by households.
Read alsoFinance Ministry borrows almost UAH 5.5 bln, US$7.9 mln in domestic market
These factors, the NBU said, are conducive to the situation when forex offers in the interbank market are higher than demand, while the inflow of foreign capital into government securities has slowed down but it does not play a significant role in the strengthening of the hryvnia.
Also, the NBU says to hedge its currency risks, companies may enter into forward contracts with banks to fix forex rates for the future.
UNIAN memo. The national currency of Ukraine, the hryvnia, has strengthened against the U.S. dollar on the interbank forex market by more than 40 kopiykas, or 1.6%, since the beginning of March 2019, to UAH 26.44/26.47 per U.S. dollar by the end of trading on March 6.