Net FX interventions by Ukraine's National Bank down 43.2% last week
The National Bank of Ukraine (NBU) significantly reduced its foreign currency sales on the interbank market last week, cutting sales by $221.77 million – or 41.4% – to $314.4 million, according to data published on the central bank’s website.
The data also show that the NBU made a rare purchase of $10 million on the market last week – the first such transaction since early March. Year-to-date, the NBU has purchased $33.5 million in foreign currency, while selling $10.24 billion.
As a result, the NBU’s net foreign exchange interventions dropped 43.2% last week to $304.4 million.
The latest figures also reflect changes in the retail foreign exchange market: for the first time this year, foreign currency sales exceeded purchases. Net daily sales fell from $19.7 million on Monday to $8.3 million on Tuesday, $1.2 million on Wednesday, and $3 million on Thursday.
During the week, the official exchange rate of the hryvnia to the U.S. dollar was volatile: it strengthened from UAH 41.3879/$1 on Monday to UAH 41.1753/$1 on Wednesday, then weakened again to UAH 41.3955/$1 by week’s end.
On the cash market, the hryvnia depreciated by 10 to 14 kopecks over the week, with a widening bid-ask spread: the buying rate reached UAH 40.95/$1, while the selling rate rose to UAH 41.10/$1.
According to analysts at KYT Group, Ukraine’s foreign exchange market in early April showed relative stability in the dollar segment, alongside a noticeable strengthening of the euro. The U.S. dollar has been weakening globally, while demand for euros in Ukraine – both structurally and due to global trends – has been rising.
“Overall, the Ukrainian FX market is seeing improved liquidity, narrowing spreads, and reduced volatility against the dollar, all signs of a more predictable exchange rate trajectory,” KYT Group analysts said.
They said that buying and selling rates in the domestic market have come close to the NBU’s official rate, moving nearly in sync and staying within a ±25 kopiikas range. This development helps curb volatility.
“In the short term (two-four weeks), the dollar is expected to trade smoothly within a range of UAH 41.10-41.80/$1, with possible fluctuations of 20-30 kopiikas depending on situational demand,” KYT Group predicts.
For the medium term (two-four months), they see a possible return to the UAH 41.80-42.50/$1 range, particularly if inflation rises, import activity picks up, or fiscal pressures intensify.
