The National Bank of Ukraine (NBU) intends to buy up to $15 million per day at the inter-bank currency market to build-up the international reserves in the first-second quarters of 2019. It is more for $5 million that the volume planned in the second-four quarters of 2018 as the NBU reported.
According to the NBU, the purchase of $15 million per day will not significantly influence the situation at the inter-bank currency market. The NBU notes that in 2018, the total volume of the trades at the inter-bank currency market grew by 38%, up to $117 billion, while the volume of the intervention of the NBU on the purchase and sale of the currency made only $5 billion, so the influence of the NBU on the forming of the rate is minimal.
At the same time, the NBU emphasized that intervention of the NBU on the purchase and sale of the currency can be less or not take place depending on the situation at the market.
“The volumes of the purchase during a day can exceed the announced volume, however, such intervention will be held for the fulfillment of other tasks provided by Currency Intervention Strategy of the National Bank for 2016-2020, particularly, for the leveling of significant fluctuation at the currency market,” the NBU explained.
The regulator notes that it will continue to minimize its influence on the process of the price setting at the currency market. The priority will be provided to those forms of intervention, on which the NBU does not offer but accept the price proposed by other partakers of the currency market. The NBU stands as “price-taker” and the currency auction and intervention on the best rate are part of it.
“The establishment of the quantitative indicators for daily intervention is important element of the regime of the floating exchange rate. The NBU does not support any meaning of the exchange rate during it and the presence of the regulator at the currency market is grounded by the necessity to accumulate international reserved, level the functioning of the currency market and support transmission of the key interest rate”, the message said.
In 2018, Ukraine’s national currency, hryvnia was recognized as one of the world’s most undervalued currencies according to the Big Mac Index.
Besides, Ukraine expects two tranches from the IMF in 2019 under the stand-by program opened in December last year.