Dollar and euro fell: NBU exchange rate for 6 November and whether the regulator could have restrained the currency surge

The National Bank of Ukraine updated the official exchange rates for foreign currencies. The American and European currencies continued to decline after a recent rise.

NBU currency rates On Friday, November 6, the NBU set the official dollar rate at 45,44 hryvnias. Compared with Thursday, November 5 (45,53 hryvnias), the U.S. currency weakened by 9 kopecks. The official euro rate also fell. On 6 November it stood at 51,04 hryvnias, which is 20 kopecks less than the day before (51,24 hryvnias). Photo: NBU currency rates on 6 November (RBK-Ukraine infographic) Also read: Banks and exchange offices rewrote the dollar and euro rate: how much the currency costs on 5 November Could the NBU have avoided the sharp dollar spike? In the opinion of Taras Kozak, founder of the investment company Univer, the National Bank had enough tools to prevent a sharp rise in the dollar rate to 45,6 hryvnias. Specifically, the regulator could have used international reserves for this. “They are enormous (47,1 billion dollars — ed.). By year-end the NBU expects they will rise to over 60 billion dollars,” the expert noted. At the same time, during the previous business week, from 26 to 30 October, the NBU already conducted a record currency intervention on the interbank market. The regulator sold 1,8 billion dollars. Taras Kozak believes that allowing a sharp devaluation leads to greater costs of gold and foreign exchange reserves than using them to support a gradual depreciation of the hryvnia. In addition, the National Bank has other ways to influence the currency market. Among them are restrictions on buying currency to pay for non-critical imports. The regulator can also hold consultations with banks and persuade them not to make aggressive purchases of currency on the interbank market, the Univer founder added. In response, the National Bank stated that consultations with market participants did take place. During the discussions, it was considered that the regulator satisfied part of the demand necessary for banks to replenish cash dollar reserves. “Therefore, there were no economic reasons for a widening gap between the cash and cashless exchange rates,” the NBU explained. The regulator also stressed that it does not set target exchange rate values. Instead, the NBU adheres to a policy of smoothing excessive fluctuations in the currency market. Also read: How the dollar rate and logistics affect fuel prices: expert Serhiy Kuyun’s explanation.