The National Bank of Ukraine reports on the full controllability of the situation on currency market and confirms the target prediction of 12% inflation for the current year.

“The volatility is not exorbitant: the exchange rate dynamics remains consistent with our aims for 12% inflation for this year and 8% - for the next”, Nikolaichuk said.

According to him, the change in exchange rate in late summer - early autumn were predicted and connected with seasonal growth of demand for currency.

However, this factor was supplemented by several unpredicted factors: “reduction of price for grains and some nervousness with situation in the Crimea and in the east of Ukraine”.

Meanwhile, Nikolaichuk emphasized that the situation on currency market remains normal.

“We have potential for the controllability of the process”, he noted, reminding about NBU gold and foreign exchange reserves, amounting to USD 14.1 bln.

The Head of Department further defined that the normal volatility of the exchange rate over the medium term are the fluctuations up to 10-20%.

“The volatility becomes not normal, when it starts generating the panic behavior of population, excess demand for currency, transferal of devaluation to prices and overrunning our target inflation rate”, Nikolaichuk explained.

He reminded that NBU strategies has three purposes of interventions: accumulating reserves, levelling short-term fluctuations and volatility reduction, as well as aid to the main monetary instrument – interest rate – in achieving inflation aims.

According to NBU representative, the question is now only about levelling fluctuations.

He added that the expected third loan tranche of the International Monetary Fund under EFF program will become the stabilizing factor in this situation.

Meanwhile, over the medium-term the UAH rate depends more on price dynamics for Ukrainian export, pace of reforms and quality of state budget 2017, Nikolaichuk noted, reminding that the National Bank traditionally does not make any predictions in regard to the exchange rate, NBU Head of Monetary Policy and Economic Analysis Department Serhei Nikolaichuk said to Hromadskyi channel.