Ukraine central bank to buy USD 10 mln per day on ForEx in 2Q18

The National Bank of Ukraine (NBU) plans to buy USD 10
mln per day on the ForEx in 2Q18 for accumulating gross international reserves,
the central bank’s website reported on Apr. 25. The NBU intends to announce the
amount of expected interventions on a quarterly basis. In the NBU’s opinion,
the interventions should not significantly affect the situation on the ForEx,
and their size could be corrected depending on the situation.

Meanwhile, the regulator said it will try to minimize
its influence on the currency pricing process, deferring to auctions and interventions
to establish “the best exchange rate,” in which the NBU functions as the
market’s price taker.

The NBU emphasized that under the floating exchange
regime the regulator not supposed to keep the exchange rate at certain level.
Instead, the goal of interventions is to accumulate the reserves and smooth out
the currency market.

Evgeniya Akhtyrko: These NBU’s
plans demonstrate significant progress in balancing Ukraine’s currency market,
reflecting its ability to foresee ForEx events and be held accountable for its
actions. They will also help currency traders form a better picture on the
demand and supply situation for a longer period.

We understand that the announced amount of USD 10
mln per day reflects the central banks’ planned total 2Q18 foreign currency
purchases of USD 600-650 mln.