The hryvnia exchange rate could remain in the range of UAH 25.7-26.3 per $1 by the beginning of autumn, according to bankers interviewed by Interfax-Ukraine.
“If there are no internal and external shocks, the corridor of the hryvnia exchange rate in May-August will be UAH 25.8-26.3/$1,” director of the treasury at Bank Credit Dnepr Oleh Kurinny said.
The expert said in the Ukrainian open economy the key factor of influence on the hryvnia exchange rate is the dynamics of export earnings, which, in turn, depend on the seasonality and conjuncture of commodity markets. In spring and summer these factors, as well as the seasonal decrease in the demand for energy imports as a rule tend to support the hryvnia rate.
“The exchange trends of May and summer months will be determined by the ratio of the currency supply, formed by the sale of export earnings by farmers and metallurgists, and the demand from the main buyers: importers and energy traders, who are afraid of a further growth in oil prices; non-residents withdrawing dividends and converting funds from repayment of government domestic loan bonds into foreign currency; banks, which since May have been conducting currency transactions under more democratic rules,” he said.
Among the additional factors influencing the hryvnia exchange rate, Kurinny named the prospects for further cooperation with the International Monetary Fund (IMF), the level of interest of financial investors in the Ukrainian securities market, the volatility of the dollar in the world financial markets, the demand and supply ratio in the cash market, the further monetary policy of the National Bank of Ukraine, and its actions in the interbank market.
This view is shared by director of the treasury department at Idea Bank Yaroslav Kabin.
“In summer, the hryvnia exchange rate traditionally strengthens. And this trend has been observed in the past two years due to a sharp decline in business activity. During this period there is no need to spend currency on imports of gas and other energy sources. In addition, the export earnings of farmers, who need hryvnia liquidity before preparation to the sowing campaign, rise. According to our forecasts, the hryvnia to U.S. dollar exchange rate could fix at the level of UAH 25.7-26.2/$1 by the middle of summer,” he said.
