National Bank of Ukraine again cuts hryvnia's official exchange rate

MOSCOW. Dec 19 (Interfax) - The National Bank of Ukraine (NBU) cut the hryvni's official exchange rate after Monday's trading by a further 0.5% to an all-time low of 37.1924/$1, Ukrainian media said, citing the regulator's website.

The hryvnia exchange rate fell by almost 3.3% since late November, when a tendency toward a weaker hryvnia took shape. However, thanks to the hryvnia's strengthening prior to that, the national currency's actual depreciation has been 1.7% since October 3, when the NBU switched to a "managed flexibility" exchange rate.

NBU Governor Andrei Pyshny, for his part, said that the growing demand for foreign currency and exchange rate movements were due to the traditional seasonal factors seen at the end of the year.

"We are now witnessing the usual seasonal process, when the demand for foreign currency increases toward the end of the year. The expenses accumulated throughout the year are being covered. Usually, they do not have time to be implemented," Pyshny said at a press briefing in Kiev on December 14.

Meanwhile, the situation on the cash market is stable. The dollar has gained only three kopiykas since Friday, rising to 37.58 hryvni/$1.

Thus, the NBU's abolition on December 1 of all restrictions on the sale of cash foreign currency by banks and non-bank financial institutions to the public has helped narrow the spread between cash and non-cash rates by nearly threefold.

As reported, the NBU's net forex sales dropped to $2.46 billion in November from $3.34 billion in October and $2.69 billion in September. A reduction in external financing to $2.04 billion caused Ukraine's international reserves to decrease for the fourth consecutive month - by 0.5%, or $187.8 million, to $38.785 billion.