In Ukraine, there is a noticeable decline in interest in cash currency, as evidenced by the trend of decreasing purchases. As a result, the supply of currency in the cash market has recently exceeded demand. This was reported by Yuriy Geletiy, Deputy Chairman of the Board of the National Bank of Ukraine, during a monetary policy briefing.
This is reported by Finway
Decrease in Currency Demand
Geletiy noted that the average daily demand in the cash currency market in Ukraine has decreased. Previously, in February, it was $41 million, in March it was $31 million, and in April it dropped to $17 million.
“We have seen a significant decrease in household activity. We are currently observing even a net supply over the last few days,” said Geletiy.
Trends in the Cashless Market
Additionally, in the cashless market, the gross supply of currency has also increased significantly – from $213 million per day in February to $240 million in March. At the same time, gross demand has only increased slightly. The National Bank of Ukraine recorded a revaluation of the hryvnia against the dollar in March and April.
The net purchase of currency by the population in March amounted to $720 million, while in February and January, this figure was $958 million and $1.48 billion, respectively. Geletiy noted that due to tariff confrontations, there has been a devaluation of the dollar against the euro. In this regard, the NBU is monitoring the situation in global financial markets, where increased volatility is observed.
“Despite the revaluation in the hryvnia-dollar pair, considering that the main currency peg is the dollar, the exchange rate of the hryvnia against the euro and other currencies is calculated based on cross-rates, so we are currently observing a devaluation against the euro,” noted the Deputy Chairman of the NBU.
Previously, Sergey Fursa, a financier at the investment company Dragon Capital, reported that the trade wars of U.S. President Donald Trump have already impacted the Ukrainian currency. The unpredictability of U.S. policy strengthens the euro, which may prompt the NBU to intervene in the currency market to maintain the stability of the hryvnia against the euro. This could also reinforce the trend of the dollar depreciating, as it loses ground against the Swiss franc and other stable currencies.