Dollar Set to Fall again in Ukraine

Ukrainians are to get a nice pre-election gift in the low dollar this week. In recent years, the mid-winter cost of USD was 29-30 UAH, and this is already selling cheaper at 28 Hryvnia and still but surely making a further decrease.

Over the past week, the dollar fell to the UAH in all segments of the foreign exchange market by 0.5-0.9%. Since last Friday the official rate of the US dollar, established by the National Bank of Ukraine (NBU), decreased from 28.03 UAH to 27.79 UAH (-0.9%).

Average rates of purchase/sale of cash USD in banks decreased during the week from 27.82/28.08 to 27.68/27.94 (-0.5%).

“We have seen a strengthening of the Hryvnia in recent weeks, a rollback after the fall seen in late December-early January,” said senior analyst Alpari Vadim Iosub. “Several factors contributed to its recovery: the increase in the sale of foreign currency earnings by exporters, the decrease in liquidity in UAH in the banking system (on correspondent and transit accounts of commercial banks in the NBU), and the sale of foreign currency by buyers of government bonds denominated in UAH.”

The NBU last Wednesday had to enter the market to buy currency. This week we can expect a decline in the dollar, traded down by week-end to 27.6 UAH, and cash in banks by the end of the week to around 27.5/27.8 UAH.

By Dimitri Dolaberidze

Image source: ft.com