Finance minister sees no grounds for exchange rate of UAH 30 per U.S. dollar

The Ukrainian Finance Ministry sees no prerequisites for the exchange rate of UAH 30 per U.S. dollar but, at the same time, it sees no tools to influence the exchange rate to move in this direction, Finance Minister Serhiy Marchenko has said in an interview with the Focus weekly news magazine.

"I do not see the prerequisites for the exchange rate to reach such a value. I do not see what tools someone could use to influence the exchange rate moving in this direction. Moreover, due to lockdown, imports to Ukraine fell by 18%, while exports shrank by only 6%, which actually levelled the balance of payments. That is, the outflow of foreign currency from the country has decreased, and this reduces the pressure on the foreign exchange market," Marchenko said.

According to him, the country needs a hryvnia exchange rate that ensures macroeconomic stability. If there are grounds for revaluation or devaluation, such processes should take place gradually, without creating a shock situation in the market, he said.

As reported, the market reacted negatively to the resignation of Governor of the National Bank of Ukraine (NBU) Yakiv Smolii in early July, and people had feared for the future financial policy of Ukraine as a whole. Due to this, the exchange rate of the hryvnia against the U.S. dollar decreased, even despite positive external and internal market conditions during this period.

On July 16, 2020, the Verkhovna Rada, based on a motion from Ukrainian President Volodymyr Zelensky, appointed Kyrylo Shevchenko as NBU governor.

According to analysts, if the new NBU team confirms its commitment to a prudent monetary policy, then the month of August will pass without shocks for the hryvnia.

op