IMF hasn’t demanded a controlled devaluation, NBU’s Nikolaychuk says
Photo: NBU

First Deputy Governor of the National Bank of Ukraine Serhiy Nikolaychuk said that the International Monetary Fund did not demand that Ukraine conduct a "controlled devaluation." He said this said in a podcast of the Center for Economic Strategy, commenting on a Bloomberg article about the IMF's alleged expectations for a gradual weakening of the exchange rate.

"To be honest, I don't remember any public statement by the International Monetary Fund that Ukraine should have controlled devaluation," he said, adding that the NBU does not work "with rumors."

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According to him, the NBU is discussing monetary and exchange rate policy with the IMF, but does not have any goals for a specific level or corridor of the exchange rate.

The NBU's strategic documents continue to provide for managed flexibility mode.

"This means that, first, our main goal remains price stability, the quantitative measurement of which is the achievement of the 5% inflation target over an acceptable policy horizon. At the same time, we set ourselves the strategic goal of increasing the flexibility of the exchange rate, its ability to respond to changes in supply and demand in the foreign exchange market, but at the same time, we do not have any goals for any exchange rate level, exchange rate band, or controlled devaluation. We are only saying that the exchange rate should be in line with the market conditions," Nikolaychuk said.

He added that in the current environment, Ukraine cannot afford to return to the floating exchange rate that existed before the full-scale invasion.

"Back then, we also had some foreign exchange interventions, but usually they were either structural interventions to purchase foreign currency on the market in order to gradually increase our reserves or interventions to smooth out significant fluctuations. What we are doing now is very similar to this system, but on a completely different scale," Nikolaychuk said.

  • At the end of October, the official dollar exchange rate for the first time since January exceeded UAH 42. NBU Deputy Governor Yuriy Heletiy said that the devaluation was due to a seasonal factor.