The National Bank of Ukraine will continue the policy of managed flexibility of the exchange rate, on the way to floating exchange rate formation, against the background of the task of maintaining stability in the foreign exchange market, the regulator reported in the Basic Principles of Monetary Policy for the Medium Term adopted by the NBU Council on September 11, UNN reports.
Details
"The NBU will continue to adhere to the principles of managed exchange rate flexibility as a transitional regime on the way back to a floating exchange rate. An important task of the NBU will remain to maintain a stable and controlled situation in the foreign exchange market, as well as to maintain bilateral exchange rate fluctuations," the NBU said.
According to the regulator, this will help "keep inflation and exchange rate expectations under control, maintain confidence in the hryvnia and protect international reserves.
"At the same time, the gradual strengthening of the exchange rate's link to market conditions will strengthen the exchange rate's role as a shock absorber, improve awareness of currency risks, and help increase the adaptability of the Ukrainian economy to internal and external changes," the NBU said.
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