National Bank of Ukraine currency interventions rise 21.6% in week as hryvnia weakens

MOSCOW. Nov 18 (Interfax) - The National Bank of Ukraine last week increased dollar sales on the interbank market by $124.5 million or 21.6% to $700.9 million, Ukrainian media reported, quoting the regulator's website.

The average daily negative balance of foreign currency purchases and sales by legal entities increased to $71.3 million in the first four days of last week, from $58.2 million for the same period of the previous week, the total being $285.3 million.

The negative balance in the retail foreign exchange market for Saturday to Thursday fell to $33.4 million from $43.4 million the previous week, with non-cash currency sales exceeding purchases on all days.

The official hryvnia-dollar exchange rate, which began last week at 41.9782 UAH/$1, weakened to UAH 42.0641/$1 in the space of three days, but ended the week at UAH 42.0423/$1.

On the cash market, the dollar exchange rate followed the official exchange rate over the past week, and overall, the dollar strengthened by approximately 12 kopecks over the past week: purchases were UAH 41.86/$1, and sales UAH 42.23/$1.

Analysts at the KYT Group FinTech platform, a major player in the retail currency market, said the hryvnia had depreciated gradually, but this was fully controlled by the National Bank, which is supported by record international reserves and the further 5.9 billion euros received from the EU last week.

KYT Group's dollar exchange rate forecast is: Short-term (1-2 weeks): base range of UAH 41.8-42.5/$1 with a possible tilt towards the upper bound of the forecast;

Medium-term (2-3 months): UAH 42.0-42.9/$1. "Currently, there is every reason for the dollar to strengthen in the international market, where positive sentiment prevails due to the Fed's clear easing policy. However, for Ukraine, the most important factors will be the situation in the energy sector and the stability of financial aid from partners," the analysts said.

Long-term (6+ months): "We maintain our forecast scenario of hryvnia devaluation. Subject to timely and rhythmic inflows of international aid, the benchmark is UAH 43.40-44.60/$1 by mid-2026, taking into account the current context of the military and political situation in Ukraine," KYT Group said.