NBU says latest fluctuations in cash forex market are temporary

The current fluctuations in the foreign exchange market are primarily due to the psychological factor and the speculative behavior of individual players in the market against the background of the announcement of mobilization in the Russian Federation, NBU Deputy Governor Yuriy Heletiy said in a comment to Interfax-Ukraine on Thursday.

“We have repeatedly, in particular during the full-scale war, experienced such situational surges, and always, as a result, the exchange rate in the cash segment of the foreign exchange market returned to the equilibrium level. I would like to remind you that the exchange rate in the cash segment of the market can both weaken and strengthen,” he noted.

Heletiy said the main reason for exchange rate fluctuations in the cash segment of the foreign exchange market before the news of mobilization in Russia was a temporary shortage of cash at individual banks.

He recalled that in order to solve this problem, the National Bank carries out operations to reinforce cash desks of systemically important banks with cash, in particular, at the beginning of this week, it carried out two cash currency exchange operations: one with US dollars, the second with euros, and earlier – three more similar operations.

According to the banker, the supply of cash currency to different cities of the country and to different branches takes time, but in the end it will help stabilize the situation with banks’ cash foreign exchange liquidity.

“We are ready to continue to support the cash desks of banks with cash to finally solve this problem. The National Bank has sufficient volumes of foreign currency in cash for this,” Heletiy emphasized.

He added that the dynamics of the exchange rate in early autumn was also influenced by traditional seasonal factors, which are also temporary: this is an increase in demand for foreign currency in cash from the agricultural sector.