Demand for foreign currency lessening in Ukraine
Kiev, April 20 (AZERTAC). NBU claims demand for foreign currency has massively imploded, but analysts still predict some devaluation by year-end.
The demand for foreign currency among the population has fallen by five times, Olena Shcherbakova, director of the National Bank of Ukraine’s department for monetary policy, said in a video commentary posted on the NBU website.
“If we take as a basis March and February last year, we have a fourfold decline in the net demand for foreign currency among the public,” she said, as reported by UkrInform, the state news service.
Shcherbakova added that active participation in the currency market by the National Bank reduced to zero in March. “That is, we did not sell currency, we held only small interventions to replenish the reserves,” she said.
The NBU monetary policy head said the result was facilitated by two factors: growth of foreign exchange inflows into the financial system and reduction in the demand for cash currency among the population.
Some analysts have said they expect the hryvnia devaluation to 8.34 UAH/USD by year-end. Others have forecast a steeper devaluation with some suggesting that it is likely that the hryvnia will eventually stabilize in early 2013 at around 12 UAH to the U.S. dollar.
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