National Bank of Ukraine's forex interventions down 8.7% last week

MOSCOW. Feb 16 (Interfax) - The National Bank of Ukraine (NBU) reduced the sales of U.S. dollars on the interbank market by $68.8 million, or 8.7%, to $725.5 million last week, Ukrainian media reported citing statistics on the NBU's website.

Over the first four days of the week, the average daily negative balance of foreign currency purchases and sales by legal entities decreased to $95.8 million from $110.0 million for the same period a week ago, totaling $383.1 million, it said.

The negative balance between purchases and sales of forex by private individuals from Saturday to Thursday also decreased to $28.7 million from $36.9 million the week before last, with cash forex purchases exceeding sales on all days.

The official hryvnia-dollar exchange rate, which started last week at UAH 43.0487/$1, weakened over the first two days of the week to UAH 43.0904/$1, but then ended the week at UAH 42.9930/$1.

The hryvnia's exchange rate on the cash market did not change significantly over the past week. On February 12, its buy rate was UAH 42.79/$1 and its sell rate around UAH 43.19/$1.

Media said citing analysts at KYT Group (Liberty-Finance LLC), a major player on the cash forex market, that there was no significant stress on the foreign exchange market in the first half of February, while the hryvnia devalued slightly against the dollar, as the official exchange rate changed from UAH 42.84/$1 to UAH 43.03/$1 at the end of the second week of February. In their view, NBU interventions prompted this moderate dynamics, as it has sold more than $4.33 billion on the market since the beginning of January.

According to experts, the U.S. dollar is supported on the international market due to the Federal Reserve's stable federal funds rate and relatively strong U.S. labor market data, while the U.S. dollar slightly strengthened against the euro to $1.1874/euro in the first half of February.

On the Ukrainian domestic market, the spread at banks and exchange offices in the first half of February was UAH 0.5-0.6 UAH/$1.

KYT Group analysts anticipate that the hryvnia's base exchange rate will be UAH 43.3-43.8/$1 within the next one to two weeks, with possible weakening fluctuations. As for a period of two to three months, they expect the hryvnia's exchange rate to range from UAH 43.50 to UAH 44.60/$1. In the coming months, the exchange rate will be influenced, among other factors, by interbank demand for forex, the situation in the energy sector, and news of international support.

"As for a long-term forecast (6+ months): the hryvnia is expected to gradually devalue against the dollar, along with the NBU's regular and substantial market support through forex interventions. The target for the first half of 2026 is UAH 43.5-44.95/$1," KYT Group said.