The National Bank of Ukraine published the results of the Money and Foreign Exchange Market Indicators Oversight Council’s third regular review of the UONIA money market indicator and key foreign exchange (FX) indicators. The review found that UONIA remains an objective money market benchmark despite methodological imperfections, while the official and reference UAH/USD exchange rates and their calculation methodology currently require no changes. The twice-a-year review is designed to detect structural market changes that could warrant replacing indicators, adjusting methodologies, or changing calculation and publication practices. For UONIA, the Oversight Council recommended that NBU units continue exploring improvements, including with international technical assistance. For FX indicators, it judged market trading volumes sufficient to produce reliable UAH/USD-based indicators, confirmed the US dollar’s role as the main exchange-rate-shaping currency, and noted that while interbank UAH/EUR trading is negligible, the euro has been trending up in other FX market segments, paving the way for a possible migration from US dollar to euro pegging of the hryvnia exchange rate. Implementation continued on previously approved FX changes, including shifting to a uniform list of currencies for exchange-rate setting, introducing a new UAH/EUR reference value, and changing methodologies for official rates for currencies other than the US dollar. As of 31 March 2025, approaches to determining the list of currencies for which the official exchange rate is set daily were revised and the monthly list was cancelled; the Oversight Council remains advisory, with decisions taken by the NBU Board.
National Bank of Ukraine 2025-04-04
National Bank of Ukraine Oversight Council flags need to improve UONIA methodology and keeps UAH/USD FX indicators unchanged
The National Bank of Ukraine's review confirmed UONIA as an objective money market benchmark despite some methodological issues and found no need to change UAH/USD exchange rates. It highlighted sufficient trading volumes for reliable UAH/USD indicators and noted the euro's increasing role in FX markets, suggesting a potential shift from US dollar to euro pegging. Implementation of FX changes continues, including a revised approach to currency lists for official exchange rates.