Page 38 - UKRRptJuly18

7.0 FX Source: CEIC
Exchange rate 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Official UAH/USD (eop) 7.7 7.99 7.96 7.99 7.99 7.99 15.77 23.41 26.20 27.52
Official UAH/USD (avg) 5.27 7.79 7.94 7.97 7.99 7.99 11.89 21.84 22.55 26.60
The hryvnia is the No. 1 performer against the dollar in the first half of 2018 , despite other developing nations succumbing to a rout. The hryvnia has gained 7.5% against the dollar this year, beating Georgia’s lari and Colombia’s peso for the top spot globally, according to Bloomberg. Ukraine's national currency strengthened against the US dollar by 0.5% in terms of its official exchange rate in May and by 0.7% in Jan-May. The State Budget 2018 lays down the average annual rate of the hryvnia at about UAH29.3/USD, to reach about UAH30.1/$by year-end. According to a survey conducted by the NBU in the first quarter of 2018, most Ukrainian businesses forecast the UAHexchange rate against the US dollar in the next 12 months in the range of UAH28-31/USD. Hryvnia reached its historical minimum in February 2015, at UAH30.01/USD.
NBU abandons fixed exchange rate. The National Bank of Ukraine (NBU) has abandoned the fixed exchange rate of the national currency, the hryvnia, it will now be determined by the market, the Governor of the NBU Yakiv Smolii announced. "We are now guided by the currency supply and demand,” he said. According to the Governor, the NBU has systemically bought and sold currency on the market. Thus, international reserves of more than $1.2bn have been purchased on the interbank foreign exchange market since the beginning of the year. “We must increase reserves, but at the same time, we should not prevent the market from determining the hryvnia rate, which corresponds to the state of our economy," Smolii explained.
The National Bank of Ukraine (NBU) has kept unchanged forced requirements to exchange foreign currency proceeds received from abroad by legal entities in the amount of 50% in order to ensure Ukraine's financial stability, the regulator said on June 13. "[The requirement] remains an effective instrument for ensuring the regular sending of foreign currency earnings to the interbank foreign exchange market and, accordingly, is important for maintaining stability in the currency market," the NBU's statement reads. The statement followed the regulator's decision made in December to extend the 50% compulsory sales of export proceeds received from abroad by legal entities due to the fact that this current level remains "an important instrument" for FX stability in the country. In April 2017, the central bank reduced the limit for compulsory sales of export proceeds to 50% (from 65%), however, the NBU extended the 50% surrender requirements for FX proceeds received from abroad by legal entities due to "the need to preserve FX market stability".
38 UKRAINE Country Report July 2018 www.intellinews.com