National Bank of Ukraine review keeps UAH/USD FX benchmarks unchanged while seeking improvements to UONIA methodology

The National Bank of Ukraine published the Oversight Council’s fourth periodic review of the UONIA money market indicator and key foreign exchange (FX) indicators, concluding that UONIA remains an objective money market measure despite methodological shortcomings, while the hryvnia’s UAH/USD official and reference exchange rate indicators currently require no methodological changes. The six-monthly review is intended to identify structural market changes or other grounds to replace indicators, adjust methodologies, or address other aspects of calculation and publication. For UONIA, the Council assessed the current methodology as imperfect and called for further work to improve it, with the NBU’s structural units continuing this work with international technical assistance. For FX indicators, the review found UAH/USD market turnover sufficient for reliable benchmark calculation and confirmed the US dollar’s dominance in price formation, while noting that the UAH/EUR interbank segment remains relatively small despite growth and that the euro’s role in other FX market segments is increasing. Implementation is continuing of previously approved proposals to introduce a new UAH/EUR benchmark and to change the methodology for calculating the official exchange rate against currencies other than the US dollar. The Oversight Council remains an advisory body, with formal decisions on money market and FX market indicators taken by the NBU Board.