• 13/06/2024 04:19

Bankers expect hryvnia to weaken amid currency liberalization

Bankers expect that the hryvnia exchange rate against the dollar will drop to 40 UAH in the summer; some experts say that the national currency will become cheaper amid the introduction of liberalization in the market. Interfax-Ukraine writes about this.

Bankers expect the hryvnia to weaken amid currency liberalization

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The official hryvnia exchange rate may weaken to the level of 40.00-40 in the summer .50 UAH/$1, Nikita Mishakov, head of the interbank operations department of Privatbank, shared his expectations.

“But I don’t think that the National Bank, having significantly replenished gold and foreign exchange reserves, will allow an early devaluation. Although the plans of the National Bank include a gradual devaluation. As far as I remember, they promised to devalue by up to 10% this year,” he said. comments.

Mishakov believes that the package of easing foreign exchange restrictions announced by the NBU on May 3 will put some pressure on the national currency exchange rate from the end of last week or from the current one.

“My personal opinion: I see the rate around 40.00 UAH/$1, 40.50 UAH/$1, perhaps. But I think that over time, as the harvesting season begins, the export of crops, I think that this will be adjusted to 39.50 UAH/$1,” the head of the interbank operations department shared his expectations.

Mishakov noted, that, in his opinion, the exchange rate corridor will be within the current level, close to the mark of 40.00 UAH/$1 with fluctuations in both directions of about 50 kopecks.

“The result of liberalization will be the need to increase the NBU foreign exchange interventions to maintain stability of the hryvnia exchange rate, but this will not entail additional threats to macro-financial stability,” Inna Provotar, head of the management accounting and business analysis department of OTP Bank, shared her opinion.

“Rate fluctuations are possible, but within acceptable limits. In the summer, we do not expect the official exchange rate to exceed 40.2 UAH/$1. At the same time, by the end of the year there is a high probability that the indicator will rise to 40.7 UAH/$1. That is, up to the level that the Ministry of Finance of Ukraine included in the 2024 budget,” she noted.

Chief Manager for Macroeconomic Analysis of Raiffeisen Bank Sergei Kolodiy noted that the package of easing foreign exchange restrictions in the short term will increase the structural deficit in the interbank market, but will improve business conditions and solve problems with servicing external loans. The announced measures for currency liberalization may increase the influx of foreign currency in the medium term, the banker believes.

However, unlike his colleagues expecting a devaluation of the national currency, Kolodiy admits that in the foreign exchange market it will be possible to observe a seasonal strengthening of the hryvnia due to the wide possibilities of interventions the central bank, given the fairly high level of international reserves.

“The NBU has enough reserves to cover the structural deficit and will use them for this purpose. Therefore, the slow seasonal revaluation of the hryvnia will not come as a surprise to us as a clear signal from the market about the ability to maintain currency stability,” he emphasized.

The banker also said that, according to Raiffeisen Bank estimates, currency liberalization was laid down back in January macro forecast of the regulator, which corresponded to an additional “leak” of currency of $5.6 billion.


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