NBU Sells Over $1 Billion in the Foreign Exchange Market for Tenth Consecutive Week
Last week, the National Bank of Ukraine sold $1.232 billion in the foreign exchange market—about $36.9 million, or 3.1%, more than the previous week. The volume of interventions has exceeded $1 billion for the tenth consecutive week.
According to NBU data, during September 14–18, the regulator sold $1.23179 billion, while over September 7–11, it sold $1.19485 billion. The central bank did not purchase foreign currency over the past week.
The series of weekly sales exceeding $1 billion has persisted since mid-July. During that period, the largest intervention volume was recorded in late August–early September when the NBU sold $1.329 billion in a single week.
Since the beginning of 2020, the NBU has already sold $36.29 billion in the foreign exchange market, while buying only about $2.3 million.
High intervention volumes are also reflected in the monthly figures. As stated at a press briefing by NBU Governor Andriy Pyshnyi, foreign currency sales amounted to about $5 billion in June, and only slightly lower in July and August.
The National Bank emphasizes that the rise in interventions does not in itself indicate a loss of foreign exchange market resilience. According to Pyshnyi, under the conditions of full-scale war, the NBU largely plays an intermediary role: international financial assistance enters the budget in foreign currency, which the government sells to the central bank and receives hryvnia to finance expenditures.
This hryvnia liquidity subsequently creates additional demand for foreign currency from the private sector. A significant portion of such demand is linked to importing products for defense and national security needs.
"The more the government sells, the more funds flow into Ukraine, the more, consequently, the National Bank must strengthen its intermediary function", explained Pyshnyi during the latest monetary policy press briefing.
He also noted that the NBU had previously anticipated further increases in intervention volumes. According to him, this does not imply weakening exchange rate stability: the managed flexibility regime continues to work, and the exchange rate responds to the balance of supply and demand.
Deputy Governor Yuriy Heletiy clarified that in January–August, gross foreign currency supply on the market grew by approximately 12%, or $4 billion, while gross demand rose by 25%, or about $13 billion.
He cited budget expenditures as one of the main factors behind increased demand. In July, they were approximately 70% higher than a year earlier, with the defense sector as the primary driver. Meanwhile, demand from the fuel and energy sector remained relatively stable after a spring surge.
According to Heletiy, the volume of NBU foreign exchange interventions does not exceed the amount of currency the regulator receives from the government. The central bank sees this as confirmation that interventions primarily redistribute the public sector's foreign currency surplus to the private sector, which has a structural currency deficit.
The NBU notes that foreign exchange interventions remain one of the key tools for maintaining market stability during the war. Full-scale invasion and financing of the budget deficit through international aid have created a significant structural shortage of foreign currency in the private sector.
Sources: National Bank of Ukraine – Currency Interventions, NBU press briefing
