Last week, one could observe the strengthening of the national currency from 39.90-95 to 39.60 hryvnia per dollar. The main reason for the strengthening of the hryvnia is the approval of US financial assistance and positive expectations from this. This was stated by Tatyana Popovich, director of capital markets at Sense Bank.
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Positive impact on the exchange rate
In addition, according to her, the NBU meeting on monetary policy had a positive impact on the exchange rate. The national currency exchange rate, as usual, tends to strengthen on this day.
“The main event last week was the NBU meeting, at which the regulator reduced the discount rate to 13.5%. In addition, at the same meeting, the NBU’s vision regarding the situation in the country’s economy was revealed. Thus, only on April 25, 2024, the hryvnia strengthened its position by UAH 0.27 and established an exchange rate of UAH 39.46/USD,” Popovich noted.
During the past week, the National Bank again acted as the main seller of the dollar and sold $532 million on the interbank market. The amount is less than before, but the demand for the currency was not as great as two weeks ago.
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According to Popovich, the main factor in the foreign exchange market now is large volumes of budget financing.
Budget funds end up in the liquidity of the Ukrainian banking system and directly on the interbank market. In the future, the receipt of financial assistance from the EU and the USA will open up more prospects for the NBU to regulate the market. During this week, you can expect the hryvnia to strengthen due to the end of the month, payment of monthly taxes and financial assistance from partners. Consequently, the hryvnia exchange rate will fluctuate in the range between 39.30−39.80 UAH/USD,” Popovich emphasized.