Ukraine's net FX interventions surge 31.4% in past week
The National Bank of Ukraine (NBU) increased its foreign currency sales on the interbank market last week by $202.03 million, or 31.4%, reaching $845.63 million, according to data published on the central bank's website.
For the third consecutive week, the NBU refrained from purchasing foreign currency from the market.
Available data indicates that the negative balance between the public's currency purchases and sales widened from $13.06 million on Monday to $25.45 million on Thursday.
Despite heightened interventions, the official exchange rate of the hryvnia strengthened by 5 kopecks over the week, settling at UAH 41.4787/$1. The wholesale cash market mirrored this change, maintaining a narrow spread of UAH 41.39-41.48/$1.
Throughout the second half of March, Ukraine's foreign exchange market remained relatively stable, displaying predictable fluctuations in the dollar's exchange rate and a more pronounced but expected strengthening of the euro. Analysts attribute these trends primarily to external factors, as domestic market conditions remained balanced due to high liquidity and the NBU's active engagement.
"The retail cash market saw the bid-ask spread narrow to 30-40 kopiikas from 50-60 kopiikas in February, indicating high liquidity and market stability. The deviation of market rates from the NBU's official rate remained minimal (±UAH 0.30), reflecting stable expectations and the NBU's predictable foreign exchange policy," analysts at currency exchange operator KYT Group noted in their biweekly review.
KYT Group forecasts that, in the short term (2-4 weeks), the dollar exchange rate will likely remain within the UAH 41.25-42.00/$1 range, influenced by sustained high liquidity, the U.S. Federal Reserve's cautious approach, and the NBU's active presence in the interbank market.
In February, net NBU interventions declined to $3 billion from $3.75 billion in January. The volume of foreign currency purchases by Ukrainians in February exceeded sales by $0.95 billion, down from $1.48 billion in January.
As of March 1, 2025, Ukraine's international reserves stood at $40.15 billion, a decrease of 6.7% ($2.86 billion) compared to the previous month.
