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The NBU more than doubled interest rates from 10% in June to fight soaring inflation and support the currency.
The NBU will keep the interest rate at 25% for the next two years. Ukraine’s central bank devalued the hryvnia and said it might keep interest rates at 25% for another two years to protect its dwindling foreign-currency reserves as Russia’s invasion ravages the economy. The National Bank of Ukraine said the “shift in the fundamental parameters” of Ukraine’s economy during the war and the dollar’s strengthening triggered the currency adjustment. It set the official hryvnia rate at 36.57 per dollar compared with 29.25, where it had been frozen for the past five months. The devaluation comes a day after Ukraine’s request to postpone foreign debt payments won support from key creditors, including the US.
8.3 Stock market
8.3.1 Equity market dynamics
For the first time since February 24, Ukraine’s stock market has resumed trading, Ukraine Business News reported on August 10. The Ukrainian Stock Exchange index remained frozen at 1718.5 since February 23, but trading resumed on August 8. The index dropped by 0.64% to 1707.43 by the market’s close. The offer on Raiffeisen Bank changed in the index basket, falling by 5.75%, however, there were no deals. Ukranfta shares also fell by 2.42% and didn’t receive any deals either. Motor Sich, Ukrnafta, Centrenergo, Myronivskyi Hliboprodukt, Ukrenergomachine, and Donbasenergo remained the same. Ukraine’s stock market has never been very attractive and daily turnover in stocks can be counted in a few million dollars. However, the Russian stock
62 UKRAINE Country Report September 2022 www.intellinews.com