National Bank Assesses Currency Indicators, UONIA Methodology Requires Improvements

The Oversight Council of the monetary and currency markets of Ukraine conducted a review of UONIA and the currency market. The methodology for calculating the official and reference exchange rates of the hryvnia against the US dollar meets market needs, while the UONIA methodology requires improvement. Reviews are conducted twice a year to identify changes in the market and determine the need to replace indicators or revise their calculations. The current UONIA methodology is not perfect but continues to objectively reflect the state of the money market. The NBU is seeking ways to improve it with the involvement of international experts. The official exchange rates of the hryvnia against the US dollar correspond to current conditions, trading volumes are sufficient for reliable indicators, and there is currently no need to change the methodology. There is an increase in trading volumes in the interbank currency market of Ukraine, both in the hryvnia-dollar segment and in the hryvnia-euro segment. The share of transactions with euros is increasing, especially in household deposits and cash transactions. The NBU continues to implement a new benchmark for the currency market — the reference exchange rate of the hryvnia against the euro, and also plans to change the methodology for calculating the official exchange rate of the hryvnia against other currencies.

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