NBU and banks to defend hryvnia rate of UAH 15-16 to dollar

15:23, 10 November 2014
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As Ukraine’s ailing national currency sagged to a new all-time low on Monday, officials from the National Bank of Ukraine and the country’s largest commercial banks met discuss how to keep the hryvnia from sinking still lower.

REUTERS

The officials said they would fight to defend a hryvnia exchange rate of UAH 15-16 to the dollar, even as the currency slumped to UAH 15.50 to the dollar in trading on the interbank market at midday on Monday.

But the National Bank of Ukraine, charged by the country’s constitution with maintaining the stability of the national currency, has said that as of the present moment it will not impose new administrative restrictions to stabilize the exchange rate.

As UNIAN reported earlier, according to the head of the National Bank of Ukraine Valeriya Gontareva, the regulator is ready to strengthen administrative restrictions on the foreign exchange market if the new strategy on rate stabilization proves to be ineffective.

On November 10, the central bank set a record-low official exchange rate of UAH 14.8042 to the dollar. Going by the official rate, since the beginning of the year the Ukrainian currency has lost 85% of its value against the US dollar, with each dollar costing UAH 6.80 more than it did January.

Since November 5, the National Bank of Ukraine has been conducting daily currency auctions of small volumes using a Dutch auction scheme to ensure exchange rate equilibrium or stabilize the exchange rate at the current level.

According to bankers, on economic grounds the exchange rate should be in the range of UAH 13.50-14 to the dollar, but the weakening rate reflects expectations of a possible escalation in the conflict in the east of Ukraine.

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