In October, the National Bank of Ukraine sold nearly $6 billion on the interbank market to support the hryvnia exchange rate. Despite record interventions, the official dollar exchange rate has repeatedly hit an all-time high. This was reported by Minfin citing Yurii Heletii, according to the portal PromPolitInform.
Over the past month, the foreign exchange market has been under significant pressure, leading to a noticeable weakening of the national currency. In the last week of October alone, the National Bank sold $1.82 billion, which was the highest weekly figure in history. As of October 28, the official dollar exchange rate reached 45.60 UAH, although the regulator set the rate at 45.3526 UAH per dollar for November 2.
Causes of the currency shortage
Deputy Governor of the NBU Yuriy Heletiy explained that the key factors putting pressure on the hryvnia were the increase in budget expenditures and a decline in foreign currency inflows from exporters. In particular, the agricultural and metallurgical sectors are showing lower volumes of currency supply to the market due to logistical complications caused by the war. The average daily net demand on the interbank market in October rose to $182 million, and reached $230 million in the final trading days of the month.
State of international reserves
Despite large-scale interventions, Ukraine’s foreign exchange reserves remain at an acceptable level. At the beginning of October, they stood at $47.1 billion, which, according to the regulator’s estimates, is enough to cover about four months of imports. This indicator also meets the adequacy standards defined by the IMF methodology.
Fluctuations in the cash market
Parallel to the interbank market, demand also intensified in the cash segment, where the daily net volume of transactions increased to $38 million compared to $34 million in September. Experts attribute this dynamic to exchange rate instability and heightened security risks, which force the population to buy foreign currency more actively. The dollar in the cash market at the end of October traded in the range of 46.30–46.57 UAH.
Change in the cost of hryvnia resources
Against the backdrop of currency fluctuations, there was a correction in interest rates on hryvnia instruments aimed at maintaining the attractiveness of the national currency. The overnight deposit certificate rate rose to 16.5%, and the UONIA interbank rate index increased to 16% per annum. A high level of liquidity is maintained in the banking system, but the NBU is actively using instruments to sterilize the surplus of hryvnia to mitigate inflationary and exchange rate pressure.
Photo: Minfin
