Sale of foreign currency by individuals surpassed purchases in 2020 - Central Bank

The total volume of transactions in the domestic foreign exchange market amounted to $19.5 billion, it increased by 1.7 and 1.3 times compared to 2018 and 2019, respectively, the CB information service reported.

Dynamics of changes in demand for foreign currency in segments of the domestic foreign exchange market

It is noted that in 2020, the demand for foreign currency by legal entities increased by 12% compared to 2019 ($13.7 billion) and amounted to $15.4 billion.

In the foreign exchange market, 60% of foreign currency was purchased for the import of equipment, goods and raw materials for the production, 21% – for the import of consumer goods and medicines, 15% – for the repayment of foreign loans, 1% – for the repatriation of foreign investors’ income and the remaining 3% – for other purposes.

According to the Central Bank, in 2020, the number of businesses that bought foreign currency in the domestic foreign exchange market increased by 16% and amounted to 8.9 thousand in December (December 2019 – 7.6 thousand).

The amount of foreign currency sold by individuals through currency exchange offices in 2020 amounted to $4.6 billion (in 2019 – $3.8 billion, an increase of 21%), the volume of purchases amounted to $4.1 billion (in 2019 – $1.8 billion, an increase of 2.3 times).

The volume of foreign currency inflows into the country through international remittances amounted to $6 billion last year.

According to the CB spokesman, many cash flows were reflected in the official sector due to the difficulty of crossing state borders in the wake of the pandemic. As a result, the volume of international remittances in 2020 did not differ significantly from the figures in 2019.

It is important for the regulator to continue the process of liberalization of monetary policy in 2021. This year, the share of foreign currency loans should be reduced from the current 50% to 45%, or at least by $2 billion.