The National Bank of Ukraine intends to protect citizens’ savings in hryvnia from inflationary depreciation.
The situation in the Ukrainian foreign exchange market remained under control, despite the weakening of the Hryvnia, in particular, under the influence of higher budget expenditures. This was discussed at a meeting of the monetary policy committee of the National Bank, the regulator’s press service reported.
“In order to cover the structural currency deficit and prevent excessive exchange rate fluctuations, the National Bank maintains an active presence in the foreign exchange market Accordingly, the NBU’s interventions increased in May,” said of the statement.
The panelists noted that for inflation and exchange rate stability, “the risk of additional budget expenditures to support defense capabilities in a protracted war is increasing, which will probably require the implementation of several initiatives in tax increase and may affect inflation.”
During the meeting, they discussed the predicted acceleration of inflation in the second half of the year, as well as significant risks due to the consequences of the war.
Nine of the 11 participants in the discussion supported the reduction of the discount rate to 13% and agreed that it would be in line with the NBU’s intention to protect citizens’ hryvnia savings from inflationary depreciation.
“Despite the nominal drop in market rates, real returns on hryvnia deposits and government bonds remain positive against the backdrop of improving expectations, and demand for instruments remains. The evidence of this is, in particular, the continued positive dynamics of temporary investments in the Hryvnia, which exceeds the increase in foreign currency savings of households in banks,” the statement said.
Let us remind you that in May the exchange rate increased by 2.1% – to 40.50 UAH/dollar. At the end of May, the official dollar exchange rate repeatedly updated its historical highs. Since the beginning of 2024, the dollar has increased by 6.6%. The Verkhovna Rada explained the collapse of the hryvnia.
Source: korrespondent
I’m Liza Grey, an experienced news writer and author at the Buna Times. I specialize in writing about economic issues, with a focus on uncovering stories that have a positive impact on society. With over seven years of experience in the news industry, I am highly knowledgeable about current events and the ways in which they affect our daily lives.