The International Monetary Fund (IMF) supports the decision of the National Bank of Ukraine to switch from a fixed exchange rate regime to a managed flexibility regime starting October 3, and believes that this will further support the stability of the economy and the foreign exchange market, said Natan Epstein, Deputy Head of the IMF Mission to Ukraine.
“The ability to manage the exchange rate in a way that minimizes fluctuations seemed to us to be an important step forward,” he said at a briefing in Kyiv on Wednesday.
Epstein reminded that as part of the program, the NBU in late June approved a strategy supported by the Fund to normalize its monetary and exchange rate policies, which includes a relaxation of exchange controls, as well as a gradual increase in exchange rate flexibility and, ultimately, a return to the inflation targeting system.
According to the deputy head of the mission, the conditions necessary for abandoning the fixed exchange rate have been met, primarily a decline in inflation, a stronger position of international reserves, and stability in the foreign exchange market.
In general, Epstein noted the trust that the NBU managed to gain in managing monetary and foreign exchange policy during the war.
The IMF representatives also expressed satisfaction with the existing dialog between the NBU and the Ministry of Finance and its results, which do not call into question the independence of the central bank.
In September, Ukrzaliznytsia JSC (UZ) increased the volume of cargo transportation in all types of traffic by 3% compared to the same period last year, to 12.035 million tons, according to preliminary data, the press service of UZ reported on the company’s website.
“The overall growth in transportation was due to a 35.5% increase in domestic freight traffic, up to 7.896 million tons,” the statement said.
At the same time, export transportation by rail in September decreased by 31.2% compared to the same period last year – to 3.578 million tons. In particular, exports of grain cargo decreased almost threefold to 1.072 million tons. At the same time, the volume of iron and manganese ore exports increased by 50.5% in September compared to September 2022, to 1.453 million tons, the report says.
In September, imports by rail decreased by 18% to 518.5 thousand tons, while transit traffic, on the contrary, increased by 2.3 times to 43.2 thousand tons.
In terms of the range of cargoes, mineral building materials are the leaders in terms of volumes: in total, their transportation increased by 77.3% in September 2023 compared to the same period last year – up to 3.310 million tons. In domestic traffic, the growth was 88% to 3.087 million tons.
“September cargo transportation showed a slight increase in total volume, however, for objective reasons, we have negative indicators of export transportation, in particular, strategically important grain cargo. “Ukrzaliznytsia once again emphasizes its readiness to transport all the necessary volumes and calls on partners from neighboring countries to jointly develop railway logistics between countries and strengthen business relations,” the statement quoted UZ Board member Vyacheslav Yeryomin as saying.
Earlier it was reported that in January-August, Ukrzaliznytsia JSC (UZ) transported 10.5% less cargo than in the same period last year – 94.9 million tons. At the same time, in August the volume of transportation amounted to 12.3 million tons, which is 13.8% more than in August last year.
In the summer of 2023, the IT market in Ukraine decreased by 1.7% compared to the summer of last year due to global trends and the war, said Taras Kitsmei, co-founder and member of the board of directors of SoftServe, at the conference “The Future of Ukrainian Exports” organized by Ekonomichna Pravda in Kyiv.
“The first is global trends. In principle, the entire IT industry in the world today is slightly “stagnating” based on investors and many other reasons. And the second trend is the difficulty of bringing new orders to Ukraine, because customers have a certain sense of war,” explained Kitsmey.
The SoftServe CEO also noted that since the beginning of the war, some customers have withdrawn from the Ukrainian market due to internal policies that prohibit placing orders in countries where there is a war. However, the Ukrainian service and quality of services have made some of them reconsider their policies, he added.
According to Kitsmey, SoftServe, in particular, manages to keep the level of customer satisfaction above 80%.
“We saw a trend that a number of customers left us at the beginning of the war, and then, comparing the quality and beauty of our services with what they received, they decided to change their policies and easily came back,” he said.
The SoftServe co-founder added that there are fewer problems with orders from foreign startups, whose internal rules are not so strict.
“If we don’t break this stability now, people will get used to war. Israel also has a constant war, and no one talks about it, let alone places orders. Our Western partners will get used to the war, the main thing is that the situation does not deteriorate,” Kitsmei emphasized.
SoftServe is one of the largest IT service companies in Ukraine. According to the company’s website, it has about 13 thousand employees and 47 offices in 14 countries. The company’s headquarters are located in Lviv and Austin (Texas, USA). The company’s development centers are located in Lviv, Kyiv, Dnipro, Kharkiv, Rivne, Ivano-Frankivsk, Chernivtsi, Uzhhorod, Ternopil, Odesa, Vinnytsia, and Khmelnytskyi, as well as in Poland, Bulgaria, Romania, and Latin America.
The volume of foreign currency purchases by the Ukrainian population in September 2023 exceeded the volume of its sales by $444.3 million, which is three times higher than in August, the National Bank of Ukraine (NBU) reported.
According to the NBU’s website, this result ensured an increase in net purchases of non-cash foreign currency by households to $261.6 million, while in August there was a net sale of $32.3 million.
Net purchases of cash foreign currency in September increased slightly – from $180.8 million to $182.7 million, according to the data.
As reported, on August 29, for the first time since the start of the full-scale war, the National Bank allowed citizens to buy non-cash currency worth up to UAH 50,000 per month from one bank. On the same date, it increased the monthly limit on the purchase of non-cash foreign currency by individuals from UAH 100,000 to UAH 200,000 in equivalent, with the subsequent placement on deposit for three months or more. This instrument was first allowed on July 21, 2022, with a limit of UAH 50 thousand per month.
The dollar exchange rate on the cash market rose from 37.88 UAH/$1 to 38.49 UAH/$1 in the first two decades of September, before dropping to 38.07 UAH/$1 at the end of the month.
According to the National Bank, the volume of non-cash foreign currency sales by households in September dropped to $223.7 million from $260.6 million in August, while the volume of purchases jumped from $228.3 million to $485.3 million.
At the same time, in the cash market in September, purchases decreased slightly from $1 billion 669.3 million to $1 billion 547.7 million, as did sales: from $1 billion 488.5 million to $1 billion 364.9 million.
According to official statistics, in 2022, the population bought $880.1 million more currencies than sold, including $1.01 billion more cash currency than sold.
In the first nine months of the year, net purchases of foreign currency by households amounted to $2 billion 405.5 million, including $1 billion 800.0 million in cash.
In the non-cash foreign exchange market, purchases of foreign currency by bank customers increased to $5.80 billion in September from $5.49 billion in August, while sales decreased to $3.96 billion from $4.27 billion, bringing the total net purchase for the first nine months to $8.79 billion.
In addition, it was reported that in September, the NBU’s interventions increased to $2.69 billion from $2.36 billion in August, while international financial support increased to $3 billion from $1.64 billion. In total, interventions amounted to $19.27 billion in the first nine months of the year.
Oil prices were stable in trading on Wednesday before the meeting of the OPEC+ Ministerial Monitoring Committee (JMMC).
The price of December futures for Brent on the London ICE Futures exchange at 8:10 a.m. on Wednesday is $90.88 per barrel, which is $0.04 (0.04%) lower than at the close of the previous session. On Tuesday, the price of these contracts increased by $0.21 (0.2%) to $90.92 per barrel.
November futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) fell by $0.02 (0.02%) to $89.21 per barrel by this time. As a result of previous trading, the value of these contracts increased by $0.41 (0.5%) to $89.23 per barrel.
The JMMC meeting, which will assess the situation on the global oil market, will be held online on Wednesday.
Traders’ attention is also focused on the weekly report of the US Department of Energy on energy reserves in the country, which will be released at 17:30 pm.
Experts surveyed by S&P Global Commodity Insights, on average, predict a 1.4 million barrel decline in US oil inventories last week. They also expect distillate stocks to fall by 1.6 million barrels, while gasoline stocks will remain unchanged.
Estimates by the American Petroleum Institute (API), released on Tuesday night, showed a 4.21 million barrel decline in US oil inventories in the week ended September 29.
The Kyiv authorities have increased funding for the Kyiv Defender program by UAH 1.26 billion, which will be used to support the capital’s security and defense forces, Mayor Vitali Klitschko said.
“At an extraordinary meeting, the Kyiv City Council has once again increased assistance to our defenders. In particular, the deputies voted to increase funding for the city’s targeted program “Kyiv Defender” by UAH 1 billion 260 million. These funds will be used to provide logistical support for the security and defense forces,” Klitschko wrote on his Telegram channel on Tuesday.
He clarified that the funds will be used “to purchase vehicles, UAVs, optical sights, night vision devices, repair and restore equipment, and other necessary things. This is a subvention, we transfer money to military units.”
Klitschko also said that the Department of Transport Infrastructure has been allocated more than UAH 1.2 billion to regulate fares for urban passenger transport, “because the price of a trip of UAH 8 has not corresponded to the cost of travel for a long time.”
“Since we are not raising the price, and transport companies need to work, we must provide them with this opportunity,” Klitschko said.
