2024-09-11T11:44:00+03:00 Finance 2024-09-21T04:00:02+03:00

Ukrainian news

Hryvnia exchange rate should continue to function as shock absorber - IMF Mission

Hryvnia exchange rate should continue to function as shock absorber - IMF Mission

The exchange rate should continue to act as a shock absorber and adjust to fundamental market factors, contributing to maintaining external stability.

This is stated in the report based on the results of the mission of the International Monetary Fund, the Ukrainian News agency reports.

"Proper monetary policy combined with a regime of managed exchange rate flexibility should help prevent excessive exchange rate fluctuations and unbalancing of exchange rate and inflation expectations. It is also important to maintain a balanced and phased approach to the easing of exchange restrictions in accordance with the approved Strategy and align it with the overall set of economic policy measures,” the message says.

The IMF also noted the stability and liquidity of the financial sector and the rapid pace of reforms, despite the hardships of martial law.

In order to preserve financial stability and increase preparedness for potential shocks, the priority is to strengthen the system of bank rehabilitation, contingency planning and bank management.

Opportunities for further easing of monetary policy until the end of the year have decreased due to the risks of rising inflation, however, the policy of the NBU is adequate and consistent with the achievement of the inflation target in the medium term.

As the Ukrainian News agency earlier reported, on March 31, 2023, the Board of Executive Directors of the International Monetary Fund approved a four-year program of expanded financing for Ukraine.

The program is implemented in two stages (war and post-war) and provides access to credit funds from the IMF in the amount of SDR 11.6 billion (equivalent to USD 15.6 billion).

Tranches under the program are provided based on the results of viewings.

In 2023, Ukraine received three tranches from the IMF for a total amount of SDR 3.3 billion (USD 4.5 billion).

This year, Ukraine has already received two tranches from the IMF in the amount of SDR 2,333.72 million (about USD 3.08 billion equivalent).

And in general, in 2024, the government will be able to receive four tranches from the IMF with a total volume of SDR 4 billion (USD 5.4 billion equivalent).

The International Monetary Fund requires Ukraine to devalue the hryvnia and lower interest rates.