The hryvnia will devalue to Hr 29/$1 by the end of 2020, due to the prospect of incidences of coronavirus (COVID-19) disease and strict quarantine measures, bankers have told Interfax-Ukraine.
“The prospects for the spread of the epidemic and strengthening the quarantine measures both in Ukraine and in trading partner countries are now an important factor of uncertainty. By the end of the year, an increase to Hr 29/$1 is not excluded, but it depends on whether or not a strict quarantine will be introduced and what the economic consequences will be,” Director of the Treasury and Stock Markets Department at Pravex Bank Artem Krasovsky said.
According to him, the strengthening of the hryvnia in November was caused by the general fall of the dollar against most currencies due to the elections in the United States, as well as the presence of several large seller exporters on the market and the wait-and-see policy taken by buyers.
“I do not think that this [strengthening of the hryvnia] is some kind of long-term trend dictated by fundamental factors. As soon as [and if] the situation with the elections in the U.S. normalizes, the dollar/hryvnia exchange rate is likely to very quickly return to the level Hr 28.4-28.5/$1,” the expert says.
Krasovsky said that he does not yet expect the hryvnia to strengthen to the level of Hr 28/$1.
According to Director of the Treasury Department of Idea Bank Yaroslav Kabin, the National Bank of Ukraine continues to remain an active player in the foreign exchange market, in particular, recently it has been actively buying out the rest of the demand on the market, preventing the exchange rate from strengthening even more, therefore, it’s not worth expecting the strengthening to the level of Hr 28/$1 and below.
The financier predicts the exchange rate corridor at the level from Hr 28.10-28.50/$1 in the coming weeks and Hr 29/$1 at the end of the year.
According to him, among the main factors for the strengthening of the hryvnia exchange rate after Nov. 5 one can single out the sale by exporters of foreign exchange revenue to pay income tax for the third quarter, as well as a decrease in the volume of foreign currency purchases by large importers of energy and electronics due to a drop in demand in anticipation of the second wave of the COVID-19 pandemic.
In addition, the decrease in the dynamics of non-residents’ leaving the government domestic loan bonds market influenced the strengthening of the exchange rate, Kabin added.
