In December, the net demand for non-cash foreign currency increased significantly due to the growth of budget expenditures and business operations at the end of the year. The average monthly hryvnia exchange rate depreciated moderately by 1% in December. This is stated in the macroeconomic and monetary review of the NBU, UNN reports.
Details
"Taking into account the need to compensate for the increased structural deficit of the private sector (mainly due to seasonal factors), as well as to maintain the stability of the foreign exchange market, the NBU increased the volume of net sales of foreign currency (up to USD 5.3 billion). At the same time, the average monthly hryvnia exchange rate depreciated moderately (by 1.0%) in December, given the increased demand for foreign currency," the NBU said.
The NBU emphasized that net demand in the cash market remained at the level of the previous month, and the difference between the cash and official exchange rates in December was about 1%.
In addition, the NBU emphasized the need to tighten the interest rate to reverse the inflation trend and bring inflation to the 5% target on the policy horizon, which will help maintain control over inflation expectations and support real yields on hryvnia instruments.
"This will fuel interest in term hryvnia savings, and, accordingly, will help reduce pressure on the exchange rate and prices as temporary pro-inflationary factors wear off," the NBU added.
Recall
The number of new vacancies and resumes decreased in December primarily due to the seasonal factor, but their growth accelerated year-on-year. In addition, wages continue to rise due to the lack of labor in Ukraine.