National Bank Sells Reserves To Protect Exchange Rate.
27 January 2008
Since the beginning of the year the National Bank has sold USD 780 mln from its foreign reserves to keep the UAH exchange rate from falling. Concorde Capital: In January, FX currency demand has significantly exceeded the supply on the interbank FX market. As a result the UAH/USD exchange rate surged to 5.16-5.19 per dollar – the official rate is 5.05. Political instability caused by the government’s dismissal, as well reduced receipts from export led to increased demand for USD. With the parliamentary elections on the horizon, exchange rate fluctuations may increase, however, the National Bank is strongly committed to avoiding large deviations from official rate (5.05). Despite the January decrease, the NBU reserves (USD 18.6 bln), still provide it enough room to maneuver.
