NBU records decrease in currency demand on interbank market

"On Friday, January 28, the demand for currency on the interbank foreign exchange market decreased and the hryvnia strengthened to UAH 28.68 per US dollar. The National Bank did not conduct any interventions on the foreign exchange market on that day," the document says.

Overall, between January 24 and 27, the NBU sold $759.5 million to smooth out excessive fluctuations on the market. The National Bank emphasizes that the key reason for the increased demand for currency was the psychological factor caused by deteriorating information environment amid geopolitical tensions. Among other reasons were temporary factors – increasing budget payments in December and high energy prices.

"We see that the situation on the foreign exchange market is under control and the market is experiencing the current shock better than the previous ones. The population's demand for foreign currency remains moderate. Given the volumes of foreign exchange market, the daily purchase of foreign currency by the business without liabilities, though slightly increased to $15 million from $11-12 million last year, does not put any pressure on it,” the document says.

The NBU says it will continue to adhere to the principles of flexible exchange rate formation. It is noted that the available volume of foreign exchange reserves allows continuing active operations on the foreign exchange market in a consistent and predictable manner, leveling temporary spikes.

As Ukrinform reported, since the start of 2022, the National Bank sold $1.51 billion and bought $20 million on the interbank foreign exchange market.

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