REUTERS
Subsidiaries of Russian banks in Ukraine are buying dollars in Ukraine's currency market, which leads to increased exchange rate of the hryvnia to U.S. dollar, according to former deputy governor of the National Bank of Ukraine (NBU) Oleksandr Savchenko.
"Russian banks are included in the pool of the so-called "white" banks that have a primary access to both the refinancing and currency markets, and they are buying dollars. When they buy dollars, the hryvnia exchange rate declines, and they are making profit on it. The profit earned is usually transferred to a parent company. According to my estimates, it [profit] ranges from $100-$150 million," Savchenko said.
The NBU should introduce restrictions, the expert underlines. The banks from each individual foreign state should not own a share of more than 8% in the Ukrainian banking system, especially when it comes to state-owned banks. Savchenko warned against setting limits at more than 8%, since a simultaneous process of funds withdrawal from a banking sector by over 8% could bring "the banking system to a halt." At the same time, he said he neither called on for a total ban of Russian state-owned banks in Ukraine.
"Regarding state-owned banks, we have only Russian state-owned banks in the territory of Ukraine. In this regard, we could raise an issue of introducing a ban on activities of state-owned banks of other states in Ukraine, especially in conditions of war. But I am against it, because it can undermine the Ukrainian banking system," Savchenko said.
According to expert estimates, the share of Russian banks in Ukraine's banking system accounts for about 18-20%.
Read alsoUniCredit to book 200 million euro charge after Ukraine dealAs UNIAN reported earlier, quotations of the Ukrainian hryvnia against the U.S. dollar on the interbank forex market by the end of trade on January 19 were at UAH 25.00/25.25 per U.S. dollar, with the hryvnia having weakened by 5% since year start.
Since the country's transition to a flexible exchange rate, the Ukrainian hryvnia depreciated against the dollar by 3.8 times in 2014 and two months of 2015 hitting a new historic low of UAH 30.01 to the dollar.
After introduction of the NBU restrictions and the allocation of the first tranche under the International Monetary Fund's new cooperation program with Ukraine, the hryvnia had strengthened with the exchange rate fluctuating within a range of UAH 21-23 per U.S.
Read alsoInflation in 2016 may be higher than government forecast of 12% - expertSince September 18, the NBU has been carrying out regular auctions for purchase of foreign currency on the interbank market to replenish its reserves.
In late October, quotes for the hryvnia against the dollar on the interbank market weakened to 23-24 UAH/USD. Therefore, the NBU changed on October 30 the purpose of holding auctions, and began selling the currency to the tune of $140 million in the course of three weeks.
The state budget for 2016 predicts the hryvnia exchange rate at 24.1 UAH/USD.