In 2023, the hryvnia strengthened; in addition, the volume of citizens’ funds in the banking system has been growing for eight months now.
The head of the Association of Ukrainian Banks, Andriy Dubas, announced this on Ukrainian radio, Ukrinform reports.
“The hryvnia has strengthened. We also actually moved away from the fixed exchange rate at the end of 2023, that is, the National Bank changed its policy and moved to a managed flexibility rate. That is, in fact, the market controls the rate, but the National Bank extinguishes the peaks,” Dubas said.
He recalled that a cash US dollar last year at this time cost more than 42 hryvnia. Now its cost fluctuates between 37–38 hryvnia.
“The situation has stabilized. 2022, when Russia attacked us, was a year of shock and emergency “fire-fighting.” In 2023, we already understood that the war would not end quickly, we adapted and began to reorient processes,” the specialist stated.
In his opinion, 2024 will be the year that “emerges on a trajectory of positive dynamics” in terms of increasing GDP and gradual economic growth.
Regarding the fact that the state budget for 2024 was calculated at the rate of 40.70 UAH per dollar, the head of AUB noted: this does not mean that the rate will necessarily rise to this level.
“The exchange rate will be determined by many factors. The exchange rate included in the budget is not an exact guideline,” Dubas explained.
According to the expert, before the start of the full-scale invasion, the external factors that influenced the Ukrainian economy and the hryvnia were the prices of the main group of goods that Ukraine sold or bought abroad.
“Now, in war conditions, there are also external factors, but they are related to somewhat different things. First of all, this is external assistance. After all, more than 50% of our state budget is formed through the support of partners. As for international support, there are two questions: will there be should it be done and how rhythmically? The question of whether it will be done is not worth it yet, because all partners continue to declare and prove support for Ukraine in the future. But the rhythm of the flow is a question. They create a temporary gap that needs to be bridged by something “, noted the head of AUB.
According to Dubas, today the Ukrainian authorities have enough reserves to plan their policies in the medium term.
He noted that for 7-8 months in a row there has been an increase in the volume of citizens’ funds in the banking system. “The latest reported amount is more than 1 trillion hryvnia. For me, this is an indicator of trust in the hryvnia and the services of Ukrainian banks. If citizens were dissatisfied with these services, they would not use them. But in general, in the second year of the war, society spends its savings more carefully. This, by the way, also affected the inflation that we have this year,” the expert stated.
Demand for cash dollars is low now, he noted. At the same time, the fact that a month ago the National Bank came up with the initiative to lift restrictions for the population on purchasing cash dollars in banks, according to Dubas, is an eloquent indicator: “Currency easing is really happening, and this emphasizes that banks have a sufficient amount of cash foreign currency.”
At the same time, Dubas pointed out that the IMF is the main indicator of whether Ukraine is on the agenda of the civilized countries of the world: “And we are really on it now. Recently, government officials signed a second revision of the EFF program with the IMF. The program itself is on the scale of our budget expenditures are small – about 4 billion. But the total package from different countries is 115 billion dollars. That is, being in cooperation with the IMF is a very important task for us. And we are working with it.”
According to the expert, international partners are looking at the effectiveness of using the assistance provided. Ukraine should also continue to reform the level of protection of creditors' rights, carry out reform of the judicial system, and anti-corruption measures.
“And we shouldn’t blame Ukraine for being somehow different. We have recently been resisting the “second army of the world” for 22 months. We need to bow our heads to the military, to the entire Ukrainian people, to Ukrainian business. To resist for 22 months in such a war “This deserves a lot of respect. I would like our external partners to understand this too. After all, when the whole world is preparing for the holidays, we think about our guys in the trenches,” the AUB chairman concluded.