FX market improved, hryvnia stabilised – Ukraine’s central bank

The foreign exchange market has stabilised due to the rhythmic flow of international aid, further adaptation of the economy to the war conditions, and the continuation of the Black Sea Initiative on grain exports, the National Bank of Ukraine (NBU) reported on Monday.

While in June last year, the difference between the official and cash hryvnia exchange rate against the dollar reached 28.5 percent, in recent weeks it has remained within a 2 to 4 percent range, Ukraine’s central bank noted.

The stabilisation of the exchange rate was due to the NBU's calibration of currency restrictions, which minimised unproductive capital outflows from the country, and its consistent monetary policy aimed at increasing the attractiveness of hryvnia assets.

In addition, the regulator introduced tools to reduce demand and increase supply in the cash segment of the FX market.

The abandonment of budget deficit financing through emission and the growing attractiveness of hryvnia assets, the NBU believes, helped further stabilise expectations.

Between 3 and 7 April, the National Bank of Ukraine bought USD 1 million and sold USD 126.34 million on the interbank foreign exchange market.