National Bank of Ukraine increases net forex interventions 21% over past week

MOSCOW. May 20 (Interfax) - The National Bank of Ukraine (NBU) almost did not buy foreign currency on the interbank market last week, while increasing its sales by $130.95 million, or 21.0%, to $755.1 million, Ukraine media reported citing statistics published on the NBU's website.

Data that the regulator published over this time show that the cash forex market saw a deficit varying from $2.0 million on Monday to $15.3 million on Tuesday, $9.3 million on Wednesday, and $12.0 million on Thursday.

The official exchange rate of the Ukrainian national currency, the hryvnia, fluctuated between UAH 41.5470/$1 at the start of the week and UAH 41.4983/$1 at its end.

The hryvnia's exchange rate remained almost unchanged on the cash market in the past week, with the U.S. dollar bought at around UAH 41.42 and sold at UAH 41.50.

Media said referring to experts from KYT Group that, while the approaching tax payment period and a seasonal increase in the number of transactions in the energy sector and energy imports add liquidity to the market, this is unlikely to cause significant exchange rate fluctuations provided that the current key factors remain in place.

Growth in Ukraine's international reserves by 10% to $46.7 billion in April has provided technical and psychological support to the market, making the policy of "controlled flexibility" more resilient, they said.

KYT Group expects the exchange rate to stay in the range of UAH 41.20-UAH 41.80/$1 within the next two to four weeks, with possible local fluctuations of 20 kopecks this way or the other under the influence of situational factors, provided that the current circumstances remain unchanged.

Within the next two to four months, the exchange rate might remain stable or shift to UAH 41.80-UAH 42.50/$1 under the influence of moderate devaluation, in the view of KYT Group.