Gontareva complained that political instability weakens the hryvnia

The reasons for the decline of the hryvnia, in addition to such seasonal factors as the decline in business activity in November, as well as payments from Treasury accounts, the head of the National Bank of Ukraine (NBU) Valeriya Gontareva has called a political instability in the country.

«In the last days, unfortunately, added another situational factor is political instability, which creates uncertainty about the future of the country and may be the reason for excessive demand for currency,» she said during a speech in Parliament on Friday, 5 February.

The head of the Ukrainian Central Bank stressed: rather than improve the situation in political field, the less it will sway the hryvnia.

As explained Gontareva, resonant news from the political arena always affect the dynamics of financial markets, and the situation in the country is no exception.

«For example, investors in Ukrainian sovereign Eurobonds started the sale of state debt, for fear of worsening short-term solvency of our country. This has led to the displacement of the yield curve of Ukrainian Eurobonds», — she noted.

The head of the NBU noted that if situational factors, the national Bank is actively working. She recalled that since the beginning of January, the regulator 5 times with sale of foreign currency on the interbank market and has sold more than 120 million.

«The national Bank can smooth only the excessive and situational fluctuations. For example, today the national Bank has come with the sale of $ 50 million. auction for smoothing situational fluctuations. And these situational fluctuations – this is our current political crisis, and not on seasonal factors, because we came out with the support of the market», — said Gontareva.

The head of NBU emphasized that the prediction of the hryvnia and the suppression of the fundamental reasons for the devaluation are outside the field of responsibility of the regulator.

«The national Bank is responsible for inflation and price stability and financial stability in the state. Our inflation target is 12%. In order to achieve it, we can’t afford the depreciation that we had. But I won’t predict the course, because the national Bank is responsible for inflation,» — said Gontareva.

«Today, the rate on the interbank currency market is 25,80-26,00 USD for 1 dollar», — said Gontareva.

However, she noted that as a result of situational and fundamental factors in the month of January the flow of currency into the country fell by 27%, compared with December 2015 and sale of currency on the interbank currency market fell by 43%.

Recall, the experts believe that the hryvnia may fall to 30 per dollar and strengthened on average by around 27.

The state budget of Ukraine for 2016 was adopted on the basis of the average annual hryvnia exchange rate at 24.1 UAH/USD. According to the expectations of the Ministry of Finance, by the end of 2016 the national currency should remain at the level of 24.4 UAH/USD.

Gontareva complained that political instability weakens the hryvnia 05.02.2016

Февраль 5th, 2016 by
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