The Chairman of the National Bank of Ukraine (NBU), Andriy Pyshny, in his recent interview with Forbes Ukraine, emphasized the importance of the exchange rate as one of the main instruments that help absorb economic shocks in the country. He noted that the responsibility for exchange rate stability, price and financial stability lies with the NBU, in accordance with the Constitution of Ukraine.
Main functions of the NBU
Pyshny stressed that the hryvnia exchange rate is not determined by either the International Monetary Fund (IMF) or the government; it is solely the responsibility of the National Bank. He explained that the hryvnia exchange rate should act as an absorber of shocks that may arise due to internal and external factors. To this end, the NBU has introduced a managed flexibility regime to ensure the stability of the foreign exchange market.
“Supply and demand, the sense of currency risks must return to all economic agents — business, government, population. This makes us strong,” he emphasized.
The impact of devaluation on inflation
Pyshny also noted that the devaluation of the hryvnia has a critical impact on inflation dynamics. The NBU seeks to return inflation to the target of 5%. He noted that accelerated inflation negatively affects the attractiveness of hryvnia assets, which remain one of the bank's strategic priorities. This allows the domestic debt market to function effectively, which is important in the context of the budget deficit.
Attractiveness of hryvnia assets for the population
Separately, Pyshny stressed that the NBU is working to encourage the population to keep their savings in hryvnia, which should be protected from inflation. “Your deposit that you made today should allow you to purchase the same amount of goods as today, compensating for this at the expense of the deposit rate,” he noted, adding that deposit rates remain positive even after a moderate devaluation.
