NBU forex interventions decline 23% m-o-m in November

The National Bank of Ukraine’s interventions to support the hryvnya from depreciation in November totaled USD 383 mln (23% less than in October), while international reserves shrank 2.1%, to USD 33.5 bln as of end-November, the central bank reported yesterday. Mykyta Mykhaylychenko: Thanks to the support, the UAH lost only 0.2% during November as depreciating pressure is stemming these months from widening current account deficit (1.7% of GDP in 2010F), temporal disruptions of currency inflow through the financial account as well as the cash market. In November, demand for foreign currency exceeded supply in the cash market by USD 1.7 bln (down only 8% from USD 1.9 bln in October). We expect currency inflow through the financial account to exceed outflow via the current account going forward and the NBU to continue to maintain a stable USD/UAH exchange rate.