The NBU cited three reasons for the collapse of the hryvnia

The devaluation of the hryvnia in late 2016 – early 2017 is not backed by fundamental factors. This was stated by the National Bank of Ukraine (NBU).

“Despite the favorable fundamental external and internal factors, at the end of December and in early 2017, temporarily intensified the devaluation pressure on the hryvnia as a result of action of a number of situational factors”, – noted in the NBU.

The national Bank of hryvnia devaluation explain such temporal factors:

  • seasonal weakening of business activity, in particular the decline in foreign currency revenues from exports of agricultural products;
  • a limited supply of currency due to the presence of high hryvnia liquidity of exporters, which received in December VAT refund in the amount of 16 billion UAH;
  • the increased demand for foreign currency due to the high budget expenditures in December.

As said Deputy head of the NBU Dmitry Sologub, the national Bank will continue the policy of liberalization of the currency market depending on current conditions and market conditions.

We will remind, the hryvnia exchange rate in Ukraine decreased significantly after the New year, but now the Ukrainian currency has strengthened, and has already returned to levels of mid January.

Experts predict that the average annual devaluation of the hryvnia, which in 2016 15%, in 2017 will slow, and up to 10%.

The historical maximum the official rate of the dollar – 30.01 UAH/USD. – was made in Feb 2015