Politics 2021-09-15T04:45:25+03:00
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Financial Experts Forecast Hryvnia Exchange Rate Of 28.0-28.3 UAH/USD In Late 2020

Financial Experts Forecast Hryvnia Exchange Rate Of 28.0-28.3 UAH/USD In Late 2020

hryvnia, exchange rate, hryvnia exchange rate, financial experts

Financial experts forecast the hryvnia exchange rate of 28.0-28.3 UAH/USD in late 2020.

They announced this to Ukrainian News Agency.

According to Vasyl Nevmerzhytskyi, advisor to the board chairperson of Creditwest Bank, the strengthening of the hryvnia is provoked by several factors at once.

"First of all, the calendar one. At the beginning of the month, the traditionally favorable period for the hryvnia begins. The season for the payment of VAT refunds ends, and foreign companies' purchases of currency for repatriation of dividends usually last several days. At the same time, the demand for hryvnia on the market is growing due to the salary payment season. As a result, at the beginning of the month, the hryvnia is strengthening. At the end of the year, this factor is added by the drop in demand for foreign currency from importers. The main contracts for the supply of goods for the high trading season have already been fulfilled, and demand is formed mainly due to critical imports - energy resources, food products, medicine," he said.

At the same time, the banker noted that the exchange rate trend will remain favorable for the hryvnia until the end of the year.

The already mentioned factors will be added by the sale of currency by the population before the holidays.

"Including funds that labor migrants are more actively transferring to the country at the end of the year. Moreover, the lockdown, which has been talked about so much in recent weeks, is scheduled for early January. That is, Ukrainians will be able to celebrate and spend. Although, of course, consumer demand will be restrained by the announced strengthening of quarantine," the banker stressed.

According to him, the exchange rate at the end of the year will fluctuate in the range of 28.0-28.3 UAH/USD.

"I believe that during 2021 the rate will be within the corridor of 25.0-27.0 UAH/USD. And on average for the year it will amount to 26.5 UAH/USD. In any case, the upper limit will not exceed 28.9 UAH/USD," Nevmerzhytskyi said.

The banker's forecast for 2021 is based on a number of assumptions at once.

Firstly, the protracted situation with the coronavirus crisis and the lockdown at the beginning of the year will restrain imports.

Secondly, at the beginning of the year, with a high probability, Ukraine will still receive paused tranches from the IMF, World Bank and the EU.

Among other things, this will open the Ministry of Finance the opportunity to place Eurobonds.

To this should be added the opening of the land market, the legalization of the gambling business and the intensification of the privatization process.

"The world markets are oversaturated with liquidity. And now investors are actively looking for new investment instruments. Ukraine has something to offer in this sense. I believe that in 2021 the portfolio of non-resident’s government domestic loan bonds in hryvnia will set a new record," he said.

Taras Kotovich, senior financial analyst of the ICU group, in turn, said that since the beginning of December, the hryvnia against the dollar was influenced by external factors, because the dollar was weakening against world currencies, and therefore the hryvnia was strengthening against the dollar, but was in no hurry to become stronger in relation to Euro.

Besides, non-residents intervened in the situation, who became interested in additional placements of the "five-year" government bonds issue - the offer of an additional USD 80 million to pay for government bonds contributed to the strengthening of the hryvnia, now without external factors.

The hryvnia exchange rate in December will depend on the demand of non-residents for government bonds, because on December 15, another additional placement of bonds with maturity in 2025, which are of interest to foreigners, was announced.

This can provide tangible support to the hryvnia exchange rate.

"And in contrast to this, active budgetary expenditures will act, which traditionally accelerate in December and cause excess demand for foreign currency," the financial expert summed up.

As Ukrainian News Agency earlier reported, financial experts forecast that the Ministry of Finance will place government domestic loan bonds worth UAH 30-35 billion by the end of the year.

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