The hryvnia exchange rate, which strengthened in the cash market and reached the level of 37.2-37.9 UAH/USD in April, may lose its position if the increasing demand for foreign currency continues in the near future.
According to the NBU, from April 17 to April 21, 2023, the Central Bank of Ukraine sold $ 560.07 million on the interbank foreign exchange market. This is 2.3 times more than in the week of April 10-14. April was a month in which the national currency strengthened, but that balance could be lost. writes about it Focus “It will not strengthen. Why can the hryvnia collapse and prevent devaluation?”
According to German Marchenko, Director of ComInBank’s Treasury Department, there was an upward trend in the cash dollar rate last week, so exporters were in no rush to sell their foreign currency earnings and withdrawal volume. There was a slight increase in deposits converted to foreign currency.
“The sharp increase in the volume of NBU interventions last week is most likely due to the simultaneous interest payment on several large issuances of government bonds, including many “long” securities.This is reflected in the increased demand for foreign currency in the MVRU,” said Anna Zolotko, director of the treasury operations department at Unex Bank.
Probably, In April-May, the advantage of demand over supply in the interbank market will continue and the Central Bank will continue to be the main foreign exchange seller. According to German Marchenko, if the cash dollar exchange rate is close to the interbank rate (36.93 UAH/USD), the supply of foreign currency from exporters is expected to increase.
“Looking at the February-March general statistics, I do not expect a serious increase in demand. On the other hand, the seed factor will no longer have a significant impact on the foreign exchange market, so the imbalance in May will likely be greater than in April. Now, according to many signs, consumer demand in Ukraine is recovering quite actively, so importers’ demand for foreign currency may increase,” says Anna Zolotko.
Previously Focus He wrote that in the next few months, the hryvnia in the cash market will approach the fixed official rate of the NBU, which has been 36.57 UAH/USD since July 2022. However, short-term fluctuations cannot be ignored.
Source: Focus
John Holton is a seasoned author and journalist, known for his expertise in economics. He currently works as a writer at 24 news breaker, where he provides readers with in-depth analysis and commentary on the latest economic developments. With a background in finance and a talent for explaining complex economic concepts in a clear and accessible way, John’s writing is a must-read for anyone interested in staying informed about the economy.