The National Bank of Ukraine (NBU) will keep the current fixed exchange rate for the time being, Deputy Head of the Regulator Yuriy Heletiy said.
“For the time being, we keep everything as it is. A fixed exchange rate helps to contain the rate of price growth and meet the needs of the economy, which is slowly recovering. We will continue to monitor the situation on the market,” he said in an interview with Forbes.ua.
He added that the NBU is ready to consider refusing to fix the exchange rate if the uncertainty associated with hostilities decreases, in particular, the end of the hot phase of the war, as well as the stabilization of foreign exchange earnings and the improvement of the situation on the financial market.
In addition, although in the long term a fixed exchange rate has more disadvantages, in particular, it creates economic imbalances, reduces the competitiveness of Ukrainian producers, but it is necessary at present because it prevents panic, protects savings from hryvnia devaluation and reduces the cost of critical imports, Heletiy explained.
“At the same time, a floating exchange rate is not an end in itself, it is a means of achieving macro-financial stability,” the deputy head of the NBU specified.
As reported, on February 24, the National Bank suspended the work of the foreign exchange market of Ukraine, except for the sale of foreign currency, and fixed the exchange rate at the official level of that day – UAH 29.2549/$1, which led to the emergence of a “black” market, where in the first days the exchange rate reached 39-40 UAH/$1.
Later, the regulator allowed the sale of currency in branches under the threat of capture by the occupiers, by decision of their management, and from May 21, it canceled the upper limit of both the rate of selling cash currency by banks in Ukraine and the rate of converting the hryvnia into foreign currency on their cards outside the country. Previously, the ceiling for such an exchange rate was the official hryvnia exchange rate fixed on the first day of the war plus 10%, or UAH 32.18/$1. The ceiling for other currencies was calculated at the cross rate against the dollar.
