NBU comments on impact of Donbas blockade on exchange rate

The National Bank of Ukraine (NBU) believes that the temporary cessation of movement of goods across the contact line within Donetsk and Luhansk regions in eastern Ukraine will have a limited impact on the exchange rate.

This is stated in the NBU’s inflation report.

"According to the National Bank, the situation in the east of the country will have a limited impact on the exchange rate. The negative impact of the blockade on the balance of payments will be largely compensated by a favorable situation on the external commodity markets," the report says.

In addition, in order to mitigate the impact of the blockade on the currency market, the National Bank can reduce the amount of currency purchase in the interbank market to replenish the foreign exchange reserves in case of need.

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