The increased demand for foreign currency is due to political events in Ukraine, the National Bank of Ukraine (NBU) wrote on its Facebook page on Tuesday.
“Now the foreign exchange market is almost in equilibrium. The situational increase in demand for foreign currency is of inertial nature caused by political events last week,” the message reads.
The central bank noted that the current restriction of the interbank market does not allow the market exchange rate mechanism to be fully introduced, and in turn, sends the wrong signals to the market about the real value of the hryvnia.
“The NBU is determined to implement a flexible exchange rate and move to inflation targeting. However, as a regulator, it has the right to smooth hryvnia exchange rate upsurges amid excessive market volatility,” the report reads.