Dollar hryvnia – currency liberalization in Ukraine – National Bank currency restrictions

Dollar hryvnia – currency liberalization in Ukraine – National Bank currency restrictions

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Ukraine managed to stabilize the currency market, which allowed it to move away from fixing the exchange rate of the hryvnia to the dollar. However, the country is not yet ready for the transition to the second stage of liberalization – the necessary conditions for this are still being formed.

This was reported by Deputy Chairman of the National Bank of Ukraine Sergey Nikolaychuk. He noted: in general, the relaxation of restrictions and a significant reduction in the discount rate over the past 9 months support the recovery of the economy.

“Despite the full-scale invasion and continuous terrorist attacks by the Russians, the Ukrainian financial system works smoothly. As a result, the economy returned to recovery in 2023. In addition to maintaining macro-financial stability, this was facilitated by the high adaptability of Ukrainian business and the population, soft fiscal policy and significant harvests.” – the message says.

At the same time, Nikolaychuk emphasized that the achieved results allowed the NBU to reduce the discount rate. And also:

  • introduce a regime of controlled course flexibility;
  • soften currency restrictions.

However, the necessary conditions for the transition of the system to the second stage of market liberalization, according to him, are only being formed. Therefore, the system is not yet ready to switch to it.

“The National Bank of Ukraine has already implemented most of the measures of the first stage of the Roadmap for easing currency restrictions. The prerequisites for the transition to the second stage are still being formed,” he summarized.

Earlier, he Nikolaychuk emphasized: in the regime of controlled flexibility, a change in course in one direction or another is a normal phenomenon. Moreover, he emphasized, the NBU warned that something like this could happen.

“As the NBU promised, the exchange rate can both weaken when the situation on the market worsens and change when the situation improves. As it was, for example, in October and the first half of November,” Nikolaychuk said.

Based on this, the periodic update of the official dollar exchange rate to the historical level should not scare Ukrainians. Even if this happens for several days in a row.

Earlier, Nikolaychuk emphasized that the NBU will not return a fixed dollar exchange rate. He explained: they moved away from this practice deliberately – when the proper prerequisites for it were formed.

Moreover, the Deputy Chairman of the National Bank of Ukraine noted that the very regime of controlled exchange rate flexibility allows him to ensure the achievement of a number of important tasks. In particular, maintaining the attractiveness of hryvnia instruments:

  • deposits;
  • bonds of domestic state loans (OBGZ).

As reported by OBOZ.UA, restrictions on the amount of purchased foreign currency, including dollars, no longer apply in Ukraine. This allows people to buy as much currency as they need, both in banks and exchange offices.

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