PrivatBank sees no reason to increase the exchange rate to UAH 40/$ - Forbes

05 June 2022, 01:56 | Economy
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State PrivatBank does not predict a sharp increase in the dollar to 40 UAH/$. CEO of PrivatBank Gerhard Bosch said this in an interview with Forbes..

According to Boesch, it is difficult to predict exchange rate fluctuations, because there is no understanding of what demand could be, since the population and businesses are still prohibited from freely buying currency.. “At the same time, I see no reason for a sharp rise in the exchange rate – not only to UAH 50/$, but even to UAH 40/$,” he added..

PrivatBank did not immediately begin to increase the exchange rate of the hryvnia into dollars and other currencies after the decision of the NBU to refuse to fix retail rates. “There was a very serious rush on the market, so we wanted to follow its reaction, and only then, when the situation stabilized and the exchange rate ceased to be speculative, we also began to approach market levels,” Boesch said.. - In general, I think that the National Bank did the right thing. Three months have passed since the introduction of the first restrictions. Gradual movement towards market exchange rate formation is an important step in order to keep the entire banking system stable. Not to mention that it is very important for the economy as a whole.”.

After changes in the work of the foreign exchange market, raising the discount rate to 25% is the next important step for the National Bank to return market control of the financial system, Boesch believes.. “A significant increase in the discount rate was necessary, given the recent inflation trends, the decrease in foreign exchange reserves and the risk of further dollarization of the economy. The main goal is to make the profitability of hryvnia savings more attractive. Of course, there will be no direct impact of such a decision on deposit rates and the cost of new loans,” he explained..

From April 14, the NBU allowed banks to sell cash currency to the population, but with a number of restrictions. In particular, the bank may sell cash currency within the difference between the total volume of purchase and the volume of its sale of cash currency..

Non-cash sale of currency by banks to individuals is still prohibited, except for some exceptions.. To prevent uncontrolled withdrawal of capital abroad, the National Bank prohibited banks from early repayment of loans received from non-residents.

On May 21, the National Bank abolished the price limit for the cash rate. Prior to this, banks were forbidden to sell cash for more than 32.2 UAH / $, there was a formula “official rate plus 10%”.

But, while maintaining restrictions on exchange rate formation on the interbank market, the price of the dollar cannot exceed the official rate by more than 1%..

The NBU has no plans to release the exchange rate yet. The refusal to fix the course will be considered after the end of the hot phase of the war.

On June 2, the National Bank for the first time since the beginning of the full-scale invasion of Russia changed the discount rate and decided to raise it from 10% to 25%.

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