The question of the optimal timing of return to the float track remains open, although significant distortions occur at a constant rate.
This was announced by a member of the Council of the National Bank of Ukraine Viktor Kozyuk.
Kozyuk noted that despite the greater stability of the banking system compared to 2014, the economy is accumulating a number of problems. especially:
- A slow recovery requires a boost from investment and consumption, which requires confidence and a reduction in military threats;
- International assistance is an important factor in maintaining external resilience, but recovery is likely to require trade imbalances by increasing pressure on reserves;
- a strong “monetary burden” is formed, which must be eliminated by a combination of rate decisions and restarting the transfer mechanism;
- The transition to a floating exchange rate must be preceded by the minimum permissible operation of the interest rate channel. Without increasing the attractiveness of hryvnia assets, there is a possibility of further volatility in the foreign exchange market;
- A fixed exchange rate causes significant distortions and is risky in the long run, but the question of the optimal timing of the shift remains open.
At the same time, he noted that the NBU, as well as the banking sector, have proven themselves more stable in terms of the implemented reforms in relation to:
- transition to inflation targeting and a floating exchange rate;
- recovery of foreign exchange reserves;
- reset banking supervision;
- Introducing Basel III and macroprudential regulation, etc.
As reported, in early March, the head of the National Bank Kirill Shevchenko said that the National Bank in order to increase stability in the foreign exchange market is studying the possibility of returning the hryvnia floating exchange rate. However, he later confirmed that the National Bank plans to keep the official dollar exchange rate at 29.25 UAH / $, as the fixed exchange rate policy now has more advantages than disadvantages.
In early June, it was reported that the National Bank of Ukraine currently does not see any prerequisites for a return to the floating rate of the local currency.