In the last month of winter, the seasonal increase in sales by agricultural enterprises, especially to prepare for the planting campaign, increased the foreign exchange supply.
In February 2023, the situation in the Ukrainian foreign exchange market improved, as the National Bank stopped financing the state budget deficit by issuing hryvnia. This is stated in the macroeconomic and monetary review of the NBU.
Thus, in the last month of winter, foreign exchange supply increased with the seasonal increase in sales, especially in agricultural enterprises preparing for the planting campaign.
Moreover, the supply was supported by the saturation of the market with foreign currency in cash, for example, lowering demand due to the possibility of buying non-cash foreign currency and then depositing it in a deposit.
The Central Bank said, “In addition, the non-monetization of the budget deficit continued to positively affect the foreign exchange market.”
How did the energy terror of the Russian Federation affect the Ukrainian currency market?
On February 16, 2023, the head of the National Bank of Ukraine Andrey Pyshny, in his column in the newspaper Ekonomicheskaya Pravda, said that the foreign exchange market reacted to the actions of the Russian invaders only once – in October 2022. That is, when the first major rocket attack on Ukraine’s energy infrastructure took place.
“Moreover, the market has learned to eliminate rocket attacks – this is the faith of the Ukrainians both in themselves and in those who literally hold the sky above us,” Pyshny said.
Previously Focus He wrote that since the beginning of 2022, the NBU has financed the state budget deficit by 355 billion UAH by issuing the hryvnia.
We also recall that at the end of January 2023, the Central Bank decided to increase the requirements for required reserves of banks. According to Central Bank experts, these measures will help reduce the excess liquidity in the banking system.
Source: Focus
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