In Ukraine, the dollar will weaken: what will happen to the hryvnia
The Ukrainian hryvnia, despite the height of the presidential campaign, has been steadily floating in a narrow range, and has been strengthening over the past few weeks. The course tested the mark at 27 UAH / $, and then returned to the mark of 26.8 UAH / $.
careersatglatfelter.com found out how and why the dollar rate in Ukraine can change in the coming week.
The main thing:
the hryvnia rate is in a stable range and the next seven days will be strengthened;
the value of a currency depends on the balance of supply and demand, while recently market participants sell more than buy;
prices of real estate, imports and cars depend on the hryvnia exchange rate in Ukraine.
What will happen to the dollar in Ukraine
In just a week, the dollar strengthened from 27.08 to 26.77 UAH / $. True, the growth rate of the hryvnia slowed. The dollar on the interbank market has declined, while the cash market has slightly increased. This, I’m sure Alpari’s senior analyst Vadim Iosub is sure, indicates a stabilization rate near current levels.
Moreover, according to the analyst, this situation will last at least a week, until April 19. “For the next week we expect a slight decline in the dollar against the hryvnia. The dollar on the interbank market can be traded in a week about 26.8 UAH, and a cash dollar in banks can be traded around 26.7 / 26.9 UAH,” the expert predicts.
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At the same time, financial analyst Vladimir Mazurenko expects more substantial strengthening. The demand for dollars has not increased, and supply periodically exceeds demand.
"In the short term, we see two main trends. First, the situation on the foreign exchange market is stable, there are no devaluation factors that could change the situation. Second, we will most likely see a strengthening within the already tested corridor. I think the likely rate is 26.6-27 UAH / $. The minimum mark is more likely, "Mazurenko predicts.
Analyst Egor Komov is sure that no significant changes should be expected for the next week, however, in general, the next few months are a good time for the hryvnia. The exchange rate of the national currency is likely to be strengthened. The only threat is news from the IMF.
“For the time being we understand that not all recommendations are fulfilled. If we receive negative signals in May, yes, this will lead to market participants increasing demand. But for the time being this is a purely hypothetical threat,” Komov says.
Financial expert Vitaliy Shapran explains: the situation in foreign markets is very attractive for Ukraine, so there is a strengthening. Thus, prices for agricultural crops, which are the basis of Ukrainian exports, are rising. In addition, the price of iron ore increased from $ 83 to $ 93 per ton, which is also beneficial for Ukraine.
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“We have a floating exchange rate, and if the situation in the markets changes, then the hryvnia will decline. If the situation is favorable as it is now, we will see approximately the same course movement that we have seen for the last 3-4 days,” he predicted.
According to the expert, the result of the first round showed that the market is preparing in advance to prevent significant fluctuations. During the second round of the hryvnia to the dollar exchange rate, "economic factors will act by 90%," Shapran is sure.
The future of the hryvnia: what to expect from the dollar
According to the IMF forecast, the devaluation of the hryvnia in the coming years will occur smoothly. In 2019, the rate will be 28.7 UAH / $, in 2020 – 30 UAH / $. And in five years the American currency will be sold at 31.94 UAH / $. A smooth decline in the overall inflation is offset by the growth of income of Ukrainians.
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At the same time, the international rating agency Fitch predicts that the hryvnia exchange rate to the dollar in 2019 will be UAH 28.86 / $. At the same time, in 2020, according to analysts, the US currency will rise to 30.6 UAH / $, according to a Fitch report.
Morgan Stanley, a major US investment bank, predicted that in 2019, the national currency of Ukraine would decline against the dollar by 4 hryvnia. Until the end of this year, the rate will drop to 31 UAH / $. According to analysts, by the end of 2020, the Ukrainian currency will fall to 32.5 UAH / $.
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