Official cash foreign currency purchases in Ukraine rise to $16.9 mln in first week since liberalization - National Bank

KYIV. April 26 (Interfax-Ukraine) - Total official purchases of cash foreign currency in Ukraine last week, when the National Bank allowed it for the first time since February 24, were the equivalent of $16.9 million, up from compared to $13.4 million-$15.1 million in the previous three weeks, the regulator said.

Sales doubled to $20.5 million, but were still way below the pre-February 24 figures, when official purchase and sale of cash in a week was about $400 million.

The National Bank on February 24 suspended the Ukrainian currency market except for the sale of foreign currency, and fixed the exchange rate at the official level of that day - UAH 29.2549/$1.

The National Bank on April 15 granted banks and non-banking financial institutions the right to sell cash currency throughout the country at a rate not higher than "official plus 10%," but within the volume of the purchased currency. As a result, many banks declared the possibility of selling foreign currency at the maximum possible rate of UAH 32.17-32.18/$1 and at the same time raised the purchase rate closer to the selling rate. However, according to market participants, it is extremely difficult to officially buy cash currency freely. On the black market, its rate is higher by about 2%.

"The cash market is reviving a little, the absolute majority of transactions is carried out outside the banking system," Mykhailo Demkiv, an analyst at the ICU investment group, said, commenting on the first full week of the official cash market after its liberalization.

As for sales of non-cash currency by individuals, their volumes remain stable: over the past week they totaled $61.9 million compared to $61.6 million-$65.9 million in the previous three weeks, while the purchase volumes for the week are still close to zero at $2 million. Before February 24, non-cash purchases averaged at about $190 million per week, and sales at $130 million.