Demand for foreign currency on 1st day of introduction of managed exchange rate flexibility expectedly increased - NBU

Net demand for the currency on the first day of the introduction of managed exchange rate flexibility expectedly increased.

This was said by Deputy Chairman of the National Bank of Ukraine Serhii Nikolaychuk during the broadcast of "Business Breakfast with Forbes", Ukrainian News Agency reports.

The reaction of the foreign exchange market to the transition to the regime of managed flexibility of the exchange rate, which came into effect on October 3, is close to the expectations of the National Bank.

"Net demand for the currency on the first day of the introduction of managed exchange rate flexibility expectedly increased. We believe that a number of sellers of the currency decided to see how the situation develops and hold their sales for a while. Instead, buyers stepped up and tested the new system to some extent. We were up to we are ready for this. We expect that in the coming days, net demand will slowly fade as market participants get used to the new reality," Nikolaychuk said.

Responding to questions about the possible impact of the new exchange rate regime on inflation and GDP, Serhii Nikolaychuk noted that this year it will be close to zero.

"Our aim to ensure exchange rate stability remains unchanged. And if earlier it was achieved by fixing the exchange rate, now we will allow minor fluctuations, smoothing them out thanks to the interventions of the NBU. Therefore, there should not be a significant effect on GDP or inflation," emphasized the deputy head of the NBU.

As Ukrainian News Agency earlier reported, the National Bank is introducing managed exchange rate flexibility from October 3.