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The National Bank of Ukraine has frozen the official exchange rate at 29.25 Ukrainian hryvnia: banks must conduct non-cash currency purchase and sale transactions with customers at a rate in the range where the lower limit is the official rate and the upper limit is the official rate of + 1%. Economist Mikhailo Kokhar agrees: The decision about a fixed exchange rate is the right one. “The NBU made absolutely the right decision under the conditions of the crisis. It is impossible to imagine more crisis conditions than an all-out war. This is not even a symbol for you and not 2008. This is a devastating blow to the economy of Ukraine, as the aggressor planned. The path should have fallen in Abyss ”, confirms the expert.
Ukrainian banks set different exchange rates for currency exchange in Ukraine and card transactions, and the fight against the negative consequences of this move began almost immediately. There was no shortage of so-called “card tourism”, but the NBU responded by lifting restrictions on the sale of cash and debiting accounts when paying with hryvnia cards abroad, as well as lowering the monthly limit – the equivalent of 100 withdrawals from one thousand to 50 thousand coins there. (You can continue to pay for goods, works and services without restrictions.) Thus, the NBU gave banks the opportunity to compete with “exchangers”.
As of June 27, the cash exchange rate for the dollar remained about 10% higher than the official non-cash rate, and today it turns out that the NBU alone cannot solve this problem. Reports that the NBU should let the hryvnia “float”, to put it mildly, are premature. The all-out war continues, the lion’s share of Ukrainian exports has stopped, there are no more transfers of workers, and there are no high profits from the export of grain and mineral products.
Maintaining an artificially low exchange rate for the dollar creates negative expectations about the hryvnia: at current prices, sellers take into account the market price, and not the rate of the “National Bank”. Perhaps the only way out is to carefully converge monetary and non-cash prices. The regulator makes a lot of efforts to approximate the monetary and non-cash exchange rates, but the demand of the population for the cash currency prevents this.
“Given the specifics of the money market, the convergence process is progressive and slow,” said financial analyst Vitaly Chabran diplomatically. This brings us back to the problems of economic factors.
“I see a problem in the fact that the demand for the currency is increasing, and the NBU is increasing the sale of reserves every month. I will think about the problem from this angle: what to do to motivate individuals and companies to buy less foreign currency,” said Olena Bilan, chief economist at Dragon. Capital, here it is not only about exchange rate policy and restrictions, but also about the entire economic policy.
The law passed by the Verkhovna Rada on June 21 received a lot of criticism, in particular, the abolition of the preferential import of cars by citizens. “The decision to scrap some of the harshest European duties on car imports (as well as many other concessions introduced in March that were also rescinded) may have been the only real step taken by the authorities to make life easier for people who have been traumatized by war and lost,” he said. – says the owner of the restaurant Maxim Khramov. Duties, production fees and VAT will be refunded from 1 July. According to the Ministry of Economy, the monthly revenue of the revenue side of the state budget is expected to increase by 3.5 billion UAH, which, allegedly, will help reduce the financing of the budget deficit by the National Bank. But is it really so? “As for taxes. The state will not collect even half of what you dream about, and repeat all previous meetings. Because they will import ten times less, ”Maxim Khramov is convinced.
Car prices (we hope front-end cars are bracketed by law) are expected to rise at least 30%, as residents brace for higher gasoline, gas and food prices. Analysts expect a new jump in demand for the currency and, accordingly, an increase in the exchange rate. Meanwhile, the NBU is forced to sell about $1 billion a week in reserves to cover the cashless currency deficit: According to the regulator, the net currency sale last week was $925.5 million, the third largest weekly intervention since the war. National Bank’s diminishing reserves are the regulator’s fee to keep the hryvnia afloat. “In the past three months, our foreign exchange market has been operating in unprecedented conditions. We are constantly analyzing and monitoring the situation, and if necessary, we are ready to improve and improve our currency restrictions,” said Vice President of the National Bank of Ukraine Yury Geleti.

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