NBU names advantages of strong hryvnia

Members of the board of the National Bank of Ukraine (NBU) say the strong hryvnia, Ukraine's national currency, reduces spending on foreign currency borrowings and debt servicing, as well as on government purchases of imported goods.

Read alsoUkraine's hryvnia may strengthen to UAH 22-UAH 23 per U.S. dollar in H1 2020 – expert

"Exporter companies can also benefit from the strengthening of the national currency, the NBU Board members noted. Firstly, it partially reduces the price of products to be exported since up to 50% of Ukrainian exporters' expenses are directly or indirectly in foreign currency (raw materials, equipment, fuel, etc.). Secondly, the strengthening of the exchange rate increases the competitiveness of Ukrainian companies in hiring employees," the Cabinet's press service said after a meeting between the government and the NBU on December 16.

At the same time, the slump in metallurgical industry, which has been observed in recent months, is caused by a fall in prices of metals on foreign markets, rather than by the strengthening of the hryvnia. So, global steel prices in September-October 2019 were 20% down year-over-year. As a result, a decline in ferrous metal production is observed not only in Ukraine but also in Germany, France, and Spain. At the same time, Ukrainian metallurgical plants, amid adverse external price conditions, tried to benefit to the maximum possible extent from the current situation to make the planned repairs, which had an impact on the production indicators in the industry.

As UNIAN reported earlier, the National Bank set the official forex rate of the hryvnia against the U.S. dollar for Tuesday, December 17, at UAH 23.49 per U.S. dollar, which was the maximum indicator since January 2016.