Friday08 November 2024
g-novosti.in.ua

The National Bank is considering the possibility of conducting interventions in euros.

The advisory council on monetary and foreign exchange market indicators has proposed to the Contact Group for monetary and foreign exchange markets the discussion of the National Bank's potential interventions in euros and the extension of the National Bank's presence in the interbank foreign exchange market, following a semi-annual review of the foreign exchange market indicators.
Национальный банк рассматривает возможность проведения интервенций в евро.

The Oversight Council of monetary and currency market indicators, following a six-month review of currency market indicators, has agreed to discuss with the Contact Group of the monetary and currency markets the possibility of the National Bank conducting interventions in euros and extending the National Bank's presence in the interbank currency market.

In a statement from the Oversight Council on the NBU website after its meeting on August 29 of this year, it is noted that the currency structure of transactions in Ukraine's currency market confirms the status of the US dollar as the main currency for exchange rate formation. However, at the same time, in the segment of operations between banks and clients, the share of euro transactions in the total volume is showing a growing trend.

"In particular, for transactions involving the purchase of non-cash currency by clients, the share of euro transactions remains over 40%," the document states.

Additionally, the Oversight Council has agreed on approaches to introducing a new benchmark – the reference exchange rate of the hryvnia to the euro as of 12:00: "It is recommended to calculate it by multiplying the reference exchange rate of the dollar by the average value of the BFIX quotes for US dollar/euro, calculated from 10:30 to 12:00."

Moreover, it has been deemed appropriate to change the methodology for calculating the official exchange rate of the hryvnia against foreign currencies (excluding the US dollar) and the accounting price of banking metals, applying approaches similar to those used for calculating the reference exchange rate of the hryvnia to the euro as of 12:00.

"The members of the Council also reached a consensus on the advisability of introducing new approaches to determining the list of currencies for which the official exchange rate is set daily, while abolishing the list for monthly setting," the report on the meeting's outcomes notes.

According to the report, the review confirmed that the trading volume is sufficient to reliably calculate an indicator for the hryvnia to US dollar exchange rate (reference and official rates) based on the current methodology for determining the indicator as a weighted average value.

"At the same time, this activity is insufficient to consider the possibility of transitioning to a fixing methodology for currency market indicators in the foreseeable future. Currently, the volume and number of transactions in any time period that could be used for calculating fixing are relatively insignificant for this fixing to be considered representative," the council members stated.

It is indicated that the calculations and statistical data presented in the review showed the continued relevance of the existing criteria for selecting transactions for the primary sample, upon which the values of the official and reference exchange rates of the hryvnia to the US dollar are calculated. This pertains to the limitations on the volume of a single transaction (from $0.1 million to $5 million) and the timing of its conclusion (by 12:00 for the reference rate and by 15:00 for the official hryvnia to US dollar rate). In particular, it was noted that compared to pre-war times, the share of transactions in the primary sample for the calculation of the official and reference values of the hryvnia to the US dollar exchange rate, discarded as outliers according to the existing methodology, has decreased.

"Based on the review of currency market indicators, it was concluded that the official/reference exchange rate of the hryvnia to the US dollar and the methodology for its calculation meet the conditions and needs of the market at the current stage of its development," the document states.

The NBU reminds that the periodic review of currency market indicators is a special procedure aimed at assessing the presence of structural shifts in the market and/or the emergence of other grounds that may indicate the need to replace existing indicators, adjust their methodology, or address other important aspects related to their calculation and publication (calculation time, publication order, etc.).

This review is conducted by the Oversight Council of monetary and currency market indicators. It was first held in February 2024, and the August review was the second.

Currently, the currency market indicators include the official exchange rate of the hryvnia to foreign currencies, the accounting price of banking metals, and the reference value of the hryvnia to US dollar exchange rate.