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Укр The Board of the Oversite conducted a periodic review of indicators of money and foreign exchange markets - NBU
Representatives of the market block of the NBU held another meeting with the most active participants of the money and currency markets.
The Oversight Board of Indicators of Money and Foreign Exchange Markets of Ukraine (hereinafter - the Oversight Board) conducted the second regular review of the UONIA money market indicator and foreign exchange market indicators (the official exchange rate of the hryvnia to foreign currencies, the accounting price of bank metals and the reference value of the exchange rate of the hryvnia to the US dollar) this year. .
The purpose of such semi-annual reviews is to assess the presence of structural shifts in the market and/or the emergence of other reasons that may indicate the need to replace existing indicators, adjust the methodology or other important aspects related to their calculation and publication. We present the key conclusions based on the results of the review.
- Money market indicator UONIA
The current UONIA calculation methodology is not perfect, but UONIA retains its ability to serve as an objective money market indicator, while there is a need to find opportunities to improve the UONIA calculation methodology. In particular, the structural units of the National Bank of Ukraine are recommended, with the involvement of international technical assistance, to continue work on studying such issues as expanding the base of agreements included in the calculation of the indicator and/or developing mechanisms for more active work of banks in the money market.
- Currency market indicators
The official / reference exchange rate of the hryvnia to the US dollar and the methodology of their calculation currently meet the conditions and needs of the market. The volume of trades on the foreign exchange market is quite sufficient to be able to calculate reliable indicators based on the exchange rate of the hryvnia against the US dollar. The currency structure of transactions on the foreign exchange market confirms the status of the US dollar as the main rate-setting currency. At the same time, approaches to the introduction of a new benchmark of the foreign exchange market were agreed - the reference value of the hryvnia to euro exchange rate as of 12:00 p.m. It was developed at the request of market participants in cooperation with an international technical assistance expert. It is recommended to calculate it by multiplying the reference exchange rate of the hryvnia to the US dollar and the average value of the BFIX dollar/euro quotes calculated from 10:30 a.m. to 12:00 p.m. In addition, it was recognized as appropriate to change the methodology for calculating the official exchange rate of the hryvnia to foreign currencies (except the US dollar) and the accounting price of bank metals, applying to the calculation approaches similar to the calculation of the reference exchange rate of the hryvnia to the euro as of 12 o'clock. The members of the Council also reached a common opinion regarding the expediency of introducing new approaches to determining the list of currencies for which the official exchange rate is set daily, with the cancellation of the list for monthly setting. The specified proposals will be submitted for public discussion, after which they will be considered by the Board of the National Bank.
We invite you to familiarize yourself with the information notices on the results of the periodic review of the IHVR at the following links:
For reference
The Board of Oversight of Indicators of Money and Currency Markets of Ukraine has been operating since August 18, 2023. This collegial body includes employees of the National Bank and external members recommended by the Contact Group of Money and Currency Markets.
The task of the Council is to work out and discuss issues related to the definition, calculation and publication of IGVR. Among them:
- Vassessment of the representativeness of the IHVR;
- definition and adjustment of the IHVR methodology;
- supervision of the internal control system;
- error handling policy;
- review of audit results;
- prevention of conflict of interests;
- consideration of claims;
- data quality control supervision;
- compliance of IGWR with IOSCO principles.
The Council is a consultative body. Any decisions regarding the IGVR are made by the Board of the NBU.
