Ukraine’s currency market makes rapid recovery as central bank declares no requirement for intervention

Just a few months after severe unrest plagued Ukraine, its central bank has stated that there is no requirement for intervention and that its FX market is stabilizing

The Ukrainian central bank sees no need for intervention on the currency market, which has shown signs of stabilization, a bank official has stated today according to a report today by Reuters.

“The tool of currency intervention remains in the (central bank’s) arsenal. We can use it but today there is no need to do so. There has been a certain stabilisation on the market,” Olena Shcherbakova, head of the central bank’s monetary policy department, said at a round-table meeting in Kiev.

At the same meeting, First Deputy Finance Minister Anatoly Myarkovsky said Ukraine’s available sources of funds and repayment requirements were in balance. “We do not expect any problems,” he said.

This dynamic has been most certainly present among firms which operate in the region and its immediate neighbors, with Moscow Exchange continuing to forge its path forward in gaining traction among Western traders due to the increasing demand for ruble liquidity and the venue’s dedicated, low-latency point to point connectivity between Moscow, Frankfurt and London.

Alpari’s volume figures for the first quarter of 2014 reflect the opinion of Ms. Shcherbakova, with the firm’s Russian division having achieved an 18% increase in trading volume during March compared with the previous month, at a time when a large number of companies are experiencing a downturn in volumes compared with those of last year.

Bearing this in mind, it appears that in certain regions of the world, political instability does not necessarily equate to fiscal instability.

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