FX market under tight grip of authorities

Обзор облигаций 25.09.2014 Following Monday's grand meeting that included President Poroshenko, Prime Minister Yatseniuk, NBU Governor Gontareva, and the CEOs of top corporations and banks, government officials and the executives of the top 40 banks convened for another meeting yesterday to formulate a plan to stabilize the hryvnia's FX rate. Over the past few weeks, market players have pushed the currency substantially lower despite NBU authorities' futile tightening measures and support at the auctions. As a last ditch effort, the president, prime minister and central bank governor met directly with the CEOs of the banks and key exporters and importers to demand their compliance in maintaining the USD/UAH rate at 12.9/USD rather than continue to weaken it. In our view, this is a short term measure. Inevitably, macro data will influence the FX rate, and any stability measures will be unsustainable.