National Bank of Ukraine's forex interventions down 15.5%, hryvnia weakens 0.8% against dollar in Feb

MOSCOW. March 2 (Interfax) - The National Bank of Ukraine (NBU) reduced its interventions on the interbank market 15.5%, or by $547.6 million to $2.991 billion in February, while the hryvnia's official exchange rate against the U.S. dollar weakened 0.8%, or by 36 kopecks, Ukrainian media reported, citing a statement on the NBU website.

In the last week of February, the NBU increased dollar sales on the interbank market 22.4%, or by $148.3 million week-on-week to $809.5 million, and the hryvnia strengthened 0.2%, or by 7 kopecks.

Over the first four days of last week, the average daily negative balance between forex purchases and sales by legal entities increased to $117.09 million from $79.2 million for the same period the week before, amounting to $471.4 million in total, the NBU said.

The cash market's negative balance from Saturday to Thursday also grew to $17.3 million from $16.6 million the week before last. Sales of non-cash forex were larger than its purchases for all of these days.

The official hryvnia-dollar exchange rate, which began last week at UAH 43.2747/$1, strengthened to UAH 43.2081/$1 at the end of the week.

The dollar exchange rate on the cash market did not change significantly last week either. The buy rate was approximately UAH 42.92/$1, and the sell rate was around UAH 43.30/$1 on February 26.

According to analysts from KYT Group, a major cash currency exchange market participant (Liberty Finance LLC), the spread between the buy rate and the sell rate on the cash market gradually contracted at the end of February, now standing at around UAH 0.4-UAH 0.5/$1.

The hryvnia gradually devalued in February, KYT Group said. In the short-term, 1-2 weeks, the base corridor is UAH 43.3-43.8/$1, likely tending towards UAH 43.5-UAH 43.6/$1, the exchange rate is expected to stay within UAH 43.60-UAH 44.60/$1 in the med-term, which is 2-3 months, and in the long-term (more than six months), it is expected to stay within approximately UAH 43.6-UAH 45.05/$1 amid a persistent devaluation trend.