The strengthening of the hryvnia exchange rate on the interbank currency market is the result of actions by the regulator, according to experts polled by Interfax-Ukraine.
“The stabilization seen on the domestic currency market is mainly
linked to auctions by the National Bank of Ukraine (NBU) conducted for
legal entities,” an advisor to the board chairman of Kyiv-based
Ukrgasbank, Oleksandr Okhrimenko, said.
He said that sharp hryvnia devaluation in September was of a speculative character.
“The reinforcement of the hryvnia at the end of last week confirms
the conclusion that the sharp hryvnia devaluation in September was only
of a speculative character. We could have avoided this if it were not
for mistakes made in the process of currency regulation. Unfortunately,
these mistakes were registered in late 2008 and early 2009,” he said.
The head of the department for monetary and currency markets at
Kyiv-based VAB Bank, Natalia Shishatska also pointed out a role of the
NBU’s currency auctions in the stabilization of the exchange rate pace.
“Over the past seven days we’ve seen a slight trend of national
currency strengthening from UAH 8.55/$1 to UAH 8.45/$1. It’s likely
that this is a result of NBU currency auctions held over the past two
weeks, which cut the pressure on the hryvnia. The exchange rate is
being reinforced, despite a fact that last week only one auction to
sell dollars was held for individuals. This means that the active
behavior of the central bank on the market over the previous two weeks
cut demand on the interbank and evoked positive psychological
expectations for the strengthening of the national currency,” she said.
“The holding of currency auctions by the NBU allowed the market to
have certain exchange rate guide lines and played a key role in the
hryvnia’s strengthening. The NBU, as one of the key market operators,
conducting auctions and smoothing out demand and supply for currency,
will be able to more actively impact on the cashless and cash markets,”
said the director of the treasury at Kyiv-based Khreschatyk Bank,
Oleksiy Kozyrev.
An analyst of the Capital Markets Block at Kyiv-based Alfa-Bank,
Oleksandr Vedeneev, said that among the reasons for the hryvnia
devaluation was a fall in demand for foreign currency from the public,
a fall in speculative demand, a rise in currency supply at some of the
largest banks with foreign capital, which sold it to conduct additional
capitalization by late 2009, and expectations of stable foreign
currency supply using funds from exports of metals and grain products.
He said that the high chances of Ukrainian companies restructuring
their foreign debts were a positive sign for the market.
“At present, around 74% of foreign debts were restructured, and
according to IMF’s forecasts (the International Monetary Fund), the
indicator could be around 85%. At the end of last week, an official
report of National JSC Naftogaz Ukrainy that the company approved the
terms for the restructuring of its foreign debt appeared. The news was
a positive sign for the currency market,” the expert said.
The experts said that by late September they do not expect large
exchange rate fluctuations, while from October 2009 demand for foreign
currency could grow.
“Unfortunately, the [hryvnia] strengthening is of a temporary
character. From early October 2009, demand for foreign currency will
start growing and the dollar exchange rate will be higher than UAH
8.5/$1,” Okhrimenko said.
He said that according to the optimistic forecast, this week the
hryvnia exchange rate on the interbank currency market would be UAH
8.35-8.45/$1, and according to a pessimistic forecast, it would be UAH
8.4-8.6/$1, while in late October it would be UAH 8.4-8.6/$1 and UAH
8.8-9/$1 respectively. If the trend of the dollar strengthening against
the euro continues on the international market, the euro exchange rate
could be close to UAH 12.2, otherwise the exchange rate would be around
UAH 12.50, he said.
