Lush: we need to save reserves
Kyiv • UNN
The National Bank of Ukraine sells dollars from its reserves to compensate for the structural shortage of foreign currency during the war, prevent the devaluation of the hryvnia, and maintain macrofinancial stability.
The National Bank of Ukraine is selling dollars from its reserves to compensate for the structural shortage of currency during the war. This was stated by the head of the National Bank of Ukraine, Andriy Pyshnyy, according to UNN.
According to National Bank Governor Andriy Pyshnyy, since the beginning of the full-scale invasion, a structural shortage of foreign currency has emerged in the Ukrainian foreign exchange market.
To prevent this, the NBU balances the foreign exchange market by selling foreign currency from international reserves. Exchange rate stability and bilateral exchange rate fluctuations are important both for maintaining moderate inflation and for protecting international reserves. In a chronic devaluation, people will have a constant incentive to buy foreign currency, which will deplete reserves
He writes that Ukraine's international reserves are exhaustive, and they are necessary for the efficient functioning of the economy and defense capabilities, especially in the context of the openness of our economy. In this context, a significant reserve security is important to minimize risks in the event of conflict situations.
Pyshnyi explains that in order to control the demand for foreign currency and save reserves, the hryvnia must have a high value. This is possible thanks to a relatively high discount rate, which, together with other instruments, stimulates competition between banks for depositors and encourages them to offer attractive terms for deposits.
The imbalance of economic expectations is dangerous, and macrofinancial stability, as well as its loss, is not only the result of decisions and actions, but also the consequence of statements made by policy makers. Thus, what they say has an impact on economic expectations, subsequent behavior, and its price
Recall
The National Bank of Ukraine is expanding the publication of external sector statistics in euros and hryvnia on its website, bringing it in line with EU practicesas Ukraine moves forward on its path to European integration and EU membership.
