NBU concerned of possible large budgetary payments putting pressure on forex market at year-end

"This is one of the issues that the National Bank is concerned about. We are in constant communication with the Finance Ministry since we are seeing today a significant accumulation of funds in the treasury account. As of yesterday [September 13, 2017], it was about UAH 65 billion [US$2.5 billion]," Churii said.

At the same time, he noted that not all the funds in the treasury account belong to the central authorities; there are also local budgets' funds.

"We are working directly with the Finance Ministry. Moreover, we raised this issue at the meeting of the Financial Stability Council, so that somehow even these expenses went in line," the official added.

As UNIAN reported earlier, the national currency of Ukraine in December 2016 depreciated by 6% against the U.S. dollar at a weighted average rate in the interbank forex market, to UAH 27.19 to the dollar, as of December 29, while the cash market rates exceeded UAH29 to the dollar.

Read alsoUkraine to allocate $6.3 bln for security, defense in 2018 – PoroshenkoIn the first half of January 2017, the devaluation trend continued. However, by the end of the month, the hryvnia's exchange rate remained at about UAH 27 to the dollar in the interbank market and around UAH 28 in the cash forex market.

Subsequently, the NBU representatives and experts explained the winter round of the hryvnia devaluation with excessive liquidity of the market due to the traditional growth of budget payments by the government at the year-end.

Read alsoNBU expects moderate exchange rate volatility this fallThe balance of funds in the single account of the State Treasury Service of Ukraine amounted to UAH 61.151 billion ($2.3 billion), as of September 1, 2017, which was the maximum indicator since the beginning of 2003.