Net retail forex purchases in Ukraine in Dec exceed $1 bln, set 11-year record - NBU

MOSCOW. Jan 9 (Interfax) - Retail foreign currency purchases made by the Ukrainian public in December 2023 exceeded sales by $1.026 billion compared to $621.8 million in November and $739.4 million in October, Ukrainian media reported, citing data from the National Bank of Ukraine (NBU).

This December's result is the highest monthly figure since October 2012, an 11-year record, the NBU said.

The significant net purchase volume was fully provided by the cash currency segment, where net purchases increased to $807.5 million from $375-380 million from November through October. At the same time, the balance of purchases and sales of non-cash currency actually decreased compared to previous months, to $218.6 million.

The NBU, which had kept the official hryvnia exchange rate unchanged at $36.5686 UAH/$1 since the end of July 2022, switched to a "managed flexibility" exchange rate system starting on October 3, 2023. Since the end of November 2023, under pressure from increased demand, a clear trend towards a weakening of the national currency has formed in the market. Despite an increase in NBU interventions, the dollar rose in price on the interbank market in December to 38.002 UAH/$1, and on the cash market, due to a jump of about one hryvnia in the last days of the year (its growth in December was about 5%), to approximately $39.4 UAH. /$1.

As the National Bank reported, on December 27-28, net purchases of foreign currency on the cash market exceeded $54 million daily, while in the remaining days of the month it rarely exceeded $40 million.

The jump in the dollar exchange rate in the cash market led to a sharp increase in net purchases of non-cash currency in the last days of 2023 and the first days of 2024 of up to $24-36 million per day, compared to an average of $8 million in the previous days of December.

In 2023, the Ukrainian public's net forex purchases totaled $4.793 billion, including cash purchases of $3.632 billion.

Over the prior year, in 2022, official statistics show the Ukrainian public bought $880.1 million more currency than it sold, including cash currency purchases of $1.01 billion.