FX market braces for normalization

Макроэкономика 03.02.2015 Yesterday, the NBU announced that it would adhere to IMF requirements and abstain from its previous tight regulation of the FX market. As a consequence of its prior interventions, several parallel grey markets developed and operated outside of the official market to the extent that when Bloomberg reported the official UAH rate at 16/USD, the more liquid unofficial rate was at 20-21/USD. Without central bank intervention to bolster the value, in anticipation that the NBU would refrain from such action in accordance with IMF demands, the hryvnia added 0.07% in nominal terms and slid 0.55% in trade-weighted terms yesterday.