In response to a request from Interfax-Ukraine, the National Bank said that the rate of hryvnya depreciation in recent weeks could create additional risks to the stability of the foreign exchange market and, consequently, price stability.
"Therefore, the National Bank is ready to take appropriate measures to ensure the stability of the foreign exchange market, which are necessary to further ensure price stability," the statement said.
The central bank pointed out that the exchange rate dynamics so far, despite a certain weakening of the hryvnya, has been consistent with the NBU's goal of ensuring moderate inflation, which confirms its approach to the target level of 5% in June.
The NBU attributes the current weakening of the hryvnya in the foreign exchange market to the expansion of net demand over the past two months, driven by increased budget spending, much of which translates into demand for foreign currency, the May currency liberalisation, and a temporary reduction in the supply of foreign currency by the agricultural sector.
The latter factor is explained by the NBU as a result of last year's harvest and "the effects of certain decisions on the regulation of the deadlines for settlements for exports of certain types of agricultural products" (the Cabinet of Ministers requested the NBU to increase the deadline for the return of agricultural export earnings to 120 days, previously reduced from 180 to 90 days).
The National Bank noted that there are now all the prerequisites to ensure the stability of the foreign exchange market.
"Soon, foreign currency from the sale of the new harvest will start coming in, and the functioning of the sea corridor creates opportunities for active exports and other commodity groups. is $24 billion," the NBU said.
In particular, this month the central bank of Ukraine expects to receive $3.9 billion from the United States.
"Accordingly, international reserves will again exceed the level of $40 billion," the NBU said in response to the agency's request.
The news agency notes that the NBU on Wednesday, 17 July, lowered the official hryvnya exchange rate by another 20.5 kopiykas to a new all-time low of 41.4627 UAH/$1. Since the beginning of July, the official hryvnya exchange rate has fallen by 92.5 kopiykas, compared to 3 kopiykas in June and 90 kopiykas in May.
Since the beginning of 2024, the dollar has appreciated by 9.1%, or UAH 3.46, at the official exchange rate, and by 13.4%, or UAH 4.89, since the NBU switched to managed flexibility on 3 October 2023.
The NBU attributed the weakening in May to the government's increased spending after receiving external financing in March-April, as well as the impact of the largest package of currency restrictions for businesses since the start of the full-scale war announced on 3 May.
Earlier, the Centre for Economic Strategy (CES) released an updated consensus forecast of seven investment companies and think tanks. According to it, the forecast for the hryvnya exchange rate at the end of this year has been lowered from 40.5 UAH/$1 to around 42 UAH/$1, which is generally in line with the state budget forecast for the end of 2024 - 42.1 UAH/$1. The forecast for the average annual exchange rate has also been downgraded from 38.7 UAH/$1 to 40.1 UAH/$1, compared to the budgeted level of 40.7 UAH/$1.
According to the State Statistics Service, annual inflation increased to 4.8% in June from 3.3% in May.