From 9:00 am on July 21, 2022, the National Bank of Ukraine adjusted the official hryvnia exchange rate against the dollar by 25% at once to UAH 36.56/dollar. It was previously stated that the dollar exchange rate would be frozen until the end of the war.
The regulator explains the devaluation of the hryvnia as follows: Such a step will increase the competitiveness of Ukrainian producers, bring exchange rates closer for different business groups and the population, and maintain the stability of the economy in a war.
The NBU noted that “fixing the hryvnia exchange rate at the level of UAH 29.25 per 1 US dollar at the beginning of the war helped ensure the stable operation of the financial system.”
During the five months of the war, significant changes took place in the Ukrainian economy.
“Under such conditions, the official hryvnia exchange rate at the level of February 24 does not correspond to realities. … The new level of the exchange rate will anchor the economy and make it resilient in the face of uncertainty. The continuation of the fixed exchange rate policy will allow the National Bank to maintain control over inflation dynamics, as well as maintain the smooth operation of the financial system. This is a key prerequisite for the stable functioning of the economy, which is vital in times of war,” - said the head of the NBU Kirill Shevchenko.
The National Bank expects that the correction of the exchange rate will increase the inflow and, accordingly, the sale of foreign exchange earnings by exporters, minimize the speculative component of the behavior of market participants and allow stabilizing exchange rate expectations.
In addition to raising the dollar, the NBU will allow banks from July 21, 2022 to sell non-cash currency to citizens with subsequent placement on a deposit for a period of three calendar months without the right to early termination within a monthly limit of UAH 50,000 (equivalent).
Also from July 21 NBU:
- changed the limit for withdrawing cash from hryvnia payment cards abroad from monthly to weekly: UAH 12.5 thousand (equivalent) for seven calendar days;
- reduced the monthly limit on P2P transfers of citizens abroad from hryvnia payment cards of Ukrainian banks from UAH 100,000 (equivalent) to UAH 30,000 (equivalent);
- set a monthly limit for settlements abroad using hryvnia payment cards in the amount of UAH 100,000 (equivalent) from all client bank accounts opened in national currency.
Also, from July 25, 2022, the permission for commercial banks to buy hryvnia in cash from a foreign financial institution for non-cash foreign currency was cancelled.
Recall that earlier the National Bank introduced restrictions on the use of bank cards of Ukrainians abroad.
Photo Wikipedia
Source: Fakty
