NBU sells $200 mln to smooth out exchange rate fluctuations

"The National Bank was actively involved in trading on the interbank foreign exchange market. We sold $200 million to smooth out excessive exchange rate fluctuations without setting the exchange rate at a certain level, as stipulated by the flexible exchange rate regime," the central bank’s press service wrote on Facebook.

According to the National Bank, demand for foreign currency exceeds supply due to the deteriorating sentiment of financial market participants due to the global spread of coronavirus. The psychological factor remains the key driver of hryvnia weakening in recent weeks.

In 2019, the situation in the foreign exchange market was favorable and there was a surplus of foreign currency. The NBU purchased almost $8 billion in the foreign exchange market for the reserves (net purchase) to smooth out hryvnia fluctuations in the direction of strengthening. The central bank stressed that there are sufficient reserves to smooth out excessive exchange rate fluctuations.

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