The NBU said the reason to strengthen the hryvnia

НБУ назвал причину укрепления гривны

Since the beginning of 2019 in Ukraine has reached more currency than was derived

The strengthening of the hryvnia to the dollar, which is observed in 2019, – display the status of Ukraine’s balance of payments. This is stated in the new “financial stability Report” National Bank of Ukraine.

As noted in the document, the current account deficit for a long time remained within the acceptable limits, and even declined relative to GDP.

“The strengthening of the hryvnia has not led to its expansion in the first 10 months of 2019. A slight increase in the negative balance of trade caused, in particular, to one-off factors was partially offset by lower amounts of dividend payments, an increase in remittances and exports of services”, – the report says.

According to the NBU, in the first 11 months of 2019, the volume of net currency purchase by the NBU amounted to 5 billion dollars, exceeding more than three times last year’s figure and the highest since 2007. Investments of nonresidents in government bonds over the same period grew by 3.7 billion.

With a floating exchange rate, the NBU does not oppose the fundamental market trends. Foreign exchange interventions only to smooth temporary imbalances, constraining the amplitude and the rate of change of the exchange rate but do not change the direction of his movements recalled the NBU.

The experts of the Bank believes that the main risks to the balance of payments remains stop the transit of Russian gas and the deteriorating terms of trade.”Combined with a possible narrowing of global liquidity on the world markets, it may adversely affect its performance and the change trends of the currency market”, – the report says.The Deputy head of the NBU Dmitry Sologub said that the strengthening of the hryvnia to the dollar, which is observed in 2019, entails more positive consequences than negative.

December 16, members of the Board of the National Bank of Ukraine and Ministers of the economic block of the government have discussed monetary policy in the framework of the Memorandum of cooperation signed in October. During the meeting, they talked mainly about the strengthening of the hryvnia and its impact on inflation and economic growth.

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