The National Bank accuses Ukrainians of weakening the hryvnia

In August, the population's purchases of foreign currency again exceeded sales, which led to a moderate weakening of the hryvnia, although in the previous two months Ukrainians were selling more currency than they were buying.

This is evidenced by the data of the National Bank, in particular, the monthly macroeconomic and monetary review for September 2023.

The net purchase of currency by the population last month amounted to $148.53 million.

At the same time, Ukrainians increased the purchase of cash foreign currency to $1.67 billion, and the sale to $1.49 billion. These are the highest figures over the past year.

At the same time, individuals sharply increased the purchase of non-cash currency to $228.31 million, although in the previous two months this figure was about $82-83 million. Sales of non-cash currency in August decreased to $260.57 million.

The growth in net demand for foreign currency in the National Bank is explained by two factors:

• return of the seasonal factor,
• situational increase in demand for cash currency due to the cancellation of the license of one major player in the currency exchange market for systematic violations.

The National Bank calls these factors the main factors for the slight weakening of the cash exchange rate.

At the same time, at the end of the month the spread began to narrow again, in particular due to the NBU permission to sell foreign currency online, and exchange rate expectations remain stable.

As noted by the NBU, remittances and grant assistance from the United States remained the main sources of foreign exchange earnings on the current account.

During August 2023, Ukraine's international reserves decreased by 3.2% amid NBU interventions to sell foreign currency to cover the difference between supply and demand in the foreign exchange market.