From October 3, the NBU will introduce managed exchange rate flexibility, which will enhance the stability of the foreign exchange market and the economy.
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The regulator’s press service stated that the National Bank will continue to monitor the situation in the foreign exchange market and will remain a key player in it, compensating for the structural deficit of foreign currency. Thanks to this, the course will change in both directions.
Managed exchange rate flexibility differs from the floating exchange rate regime currently in force in Ukraine. until February 24, 2022. Under the current regime, the NBU will continue to carefully monitor the situation in the foreign exchange market and will remain a key player in it.
At the same time, the NBU will significantly limit these fluctuations, preventing both a significant weakening of the hryvnia and a significant strengthening.
The official rate, which was fixed during the war and is now 36.57 UAH/USD, under the new regime will be determined on the basis of the rate for transactions on the interbank market, and will not be set prescriptively by the National Bank in accordance with NBU Resolution No. 18, as is the case occurred from February 24, 2022.
The report notes that taking into account the steady progress in reducing inflation, the accumulation of a significant level of international reserves, the increasing attractiveness of hryvnia deposits and government bonds, the National Bank is moving into a regime of managed exchange rate flexibility.
Let us remind you that for almost a year and a half the exchange rate on the cash market and bank card rates have not been fixed. During this time they both increased and decreased.
Source: Racurs
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