National Bank Restocks Cash Reserves Amid Rising Exchange Rate Gap

Ukraine’s currency has slipped to a new low as the National Bank of Ukraine established an official rate of 45.66 hryvnias per dollar on November 4, marking a 13-kopeck increase from the previous day, epravda.com.ua reported. The euro rate remained steady at 51.05 hryvnias.

Banks Request Minimal Cash from Central Bank Interventions

The central bank stepped in to supply cash currency to financial institutions following a widening gap between official rates and the rates offered for retail purchase. On November 3, the regulator offered banks up to $100 million and 100 million euros in exchange for non-cash currency to restock branch tills.

Commercial banks requested only $14 million in U.S. currency. No banks asked for euros. The regulator approved every submitted application in full.

The results demonstrate that the financial system lacks any actual shortage of physical cash notes. The regulator stated that economic fundamentals do not justify any further widening of the spread between official exchange rates and the rates charged by commercial exchange points.

Factors Driving Up Currency Demand

Officials attribute the month-start surge in currency demand to rising state budget expenditures directed toward security and defense needs. Increased retail buying by citizens after the renewal of monthly transaction limits also contributed to the pressure.

On the supply side, substantial value-added tax reimbursements issued at the end of October restricted the flow of incoming currency. Russian military shelling further disrupted seasonal export growth, leading agricultural producers and metallurgical enterprises to sell smaller volumes of foreign currency.

The central bank maintains that the situation remains fully manageable. International reserves are sufficient to sustain stability across the domestic currency market.