Last week the National Bank of Ukraine continued to be a major newsmaker of the country. Blaming NBU involvement in devaluing the national currency even forced the head of department Vladimir Stelmakh interrupt his vacation.
NBU

said the full transition to the auction guidelines for implementing its policy of intervention in the foreign exchange market. The head of the National Bank promised that the selling rate of exchange at the auction will be close to the interbank. Do you want $ 200 million to UAH 10. The dollar - take, - he said at a press conference.

Holding National Bank foreign exchange auctions without any restrictions for the purchase, according to Chairman of the Board of VAB Bank Peter Baron, was to reduce demand on the interbank market, but also led to positive psychological expectations of strengthening the national currency, which influenced the decline of the dollar relative to UAH.

This trend must take into account the fact that the bulk of applications for purchase of foreign currency has been moved from ICMU to auction the NBU, with the result that we observed a significant excess foreign exchange supply over demand, resulting in strengthening the national currency. If NBU will satisfy the majority of applications to buy U.S. dollars at auctions, we can assume that the market rate will also be recorded on a mark of the auction rate cut, - said the banker.

According to most analysts, the new foreign exchange auction market and are the most effective method of intervention among those who still held the National Bank.

With their help, the NBU will be able to find a local equilibrium exchange rate, taking the highest purchase price, and then gradually move it down by selling the currency. Actually, what happened during the first, a trial auction on Tuesday 8 September, when banks sent requests to buy the courses 8,01-8,60 grn. for a dollar, but managed to buy only those who said the dollar buying by 8,25 UAH. and more expensive (but the weighted average rate of 8.32 indicates that the purchase NBU dollar from 8,60 UAH. was rather exotic). On the same day and next morning the banks have been feverishly to dump the currency and the exchange rate on the interbank market reached the level 8,40-8,45 grn. The appreciation of the cut-off of 8, 25 to 8,35 UAH. up to the auction on Thursday confirmed that the NBU could withdraw from the market of rush build-up and brought the course to a more restrained level, - says economist Astrum Investment Management Alexei Blinov.

Head analysis of financial markets ING Wholesale Banking Pecheritsyn Alexander said that even the introduction in March auction of foreign currency to repay loans natural persons has been able to reduce the deterioration of the quality of foreign currency loans in this segment, although the auction principle was realized it did not fully.

The very fact that the announcement of the auction a positive impact on devaluation comforting sentiment in the market. So if NBU will continue to conduct auctions, and use it exclusively market-based methods of sale, the market will take speculative component and the course is established at a level that will balance current supply and demand , - says Mr. Pecheritsyn.
 

perfect far

How effective will be the foreign exchange auctions, time will tell. However, according to the interim administrator of AB RDB Andrew Yatsura, even an application for an auction and the opportunity to bring to market a billion dollars of foreign reserves, has led to a decline of the dollar by almost 5%, that is, more or less came back to strengthen the position of the hryvnia . So time will tell how these innovations will be valid.

Unfortunately, the price of course, the dollar-hryvnia laid speculative and panic. The situation is worsened by the fact that the rate fixing used to like the future of the electorate and are trying to discredit their competitors. Naturally, this leads to panic. And when panic - always lose, - says Andrew Yatsura.

expect miracles from a new method of intervention still is not worth, according to Alexei Blinov, the results of auction of 10 September indicate that the course is not going to overcome the back mark in UAH 8. dollar.

At the same time, we expect this fall, the new exchange rate shocks, which resulted in the level of 9 UAH. per dollar would be passed. The NBU is perfectly aware that they can only smooth out the jumps of the course, but does not break the trend. In our opinion , the best policy to curb the exchange rate for the NBU would give the market a signal that he will not abandon the new methods of intervention and will go to market with a fairly large amounts of currency, once again will devaluative jump. The main thing is that these auctions do not become another ineffective attempt to flood the market currency , - said the expert.

I have seen that the currency regulation with the help of any tools can be effective only if it is regular and planning. To rate fixing does not matter what type of injection of foreign currency will be used: intervention, auctions, trust auctions or anything else. Main - predictability of actions of NBU. We were able to see it this week - enough statements Stelmakh and the auction. It is worth noting that the regularity of the auction with a price close to the real level of interbank quotations, is both an effective tool for managing the course, and most economical way minimum spend for that foreign currency reserves , - said the deputy chairman of the bank Contract Paul Krapivin.

Vyacheslav Mironenko

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