The hryvnia losing value for 2016 changed the dollar rate in Ukraine

In Ukraine, for several years the national currency has lost 2/3 of its value. In 2014, the year “American” could be bought for 8 hryvnia, and on the last Friday of the expiring 2016 the official rate was already 27,19 UAH/USD. So low the hryvnia this year fell only traditionally devaluation in February.

How to tell the experts, the rate of the national currency this year was influenced by a number of factors: the political crisis in the beginning of the year, the need to import natural gas, unfavorable conjuncture on external markets, the suspension of cooperation with the IMF. As a result, during the year the hryvnia depreciated from 24.8 to 26.39 per dollar. The website “Segodnia” to find out why the change of dollar exchange rate in 2016.

The forecasts were not justified

The national Bank of Ukraine (NBU) in the beginning of the year predicted exchange rate of hryvnia against the dollar in the range of 24.4-24.8 per. Later this forecast had to be revised. Already in February, the official rate of the American currency reached 27,24 hryvnia. According to senior analyst at Concorde Capital Oleksandr Parade, on the stability of the national currency was influenced by two main factors: cooperation with international lenders, including the IMF, and the situation on external resource markets. Prices on metals, fertilizers, wheat fell, and with it reduced foreign exchange earnings to the country.

NBU Deputy Oleg Churiy explained that the Ukrainian currency market had been adversely affected by the devaluation in the countries-trading partners. “The seasonal downturn in January caused a decline in foreign currency revenues in February and political instability and the delay in the resumption of cooperation with the International monetary Fund (IMF) adversely affect the expectations of business”, – said in his comments released by the Central Bank.

In March, according to experts, the national currency, “dipped” due to the suspension of cooperation with the IMF. In addition, Ukraine has prolonged the political crisis – the Cabinet of Ministers of Yatsenyuk planned to dissolve, but the final decision was delayed. Starting from April to the end of summer, under the new government, the dollar has hovered around 25 USD.

However, since the second half of August, “summer lull” I interrupted. On 15 August the dollar has overcome the “psychological mark” and broke a five-month record. Experts explain that the autumn is traditionally tough for the currency market. According to Alexander Parade, the reasons for the “fall devaluation” are several: you have to buy a large amount of imported gas, to extinguish foreign currency loans, in addition the demand in the foreign exchange market in this period is growing, and the supply remains at the same level. As a result, the torque is noticeably “thinner”.

Why the dollar rises in price in the fall:

  • have to stock up on imported gas for the heating season (about 8 billion cubic meters of gas for the second half);
  • Ukrainians are buying the currency (the demand will increase by 10%);
  • you have to actively “put out” for foreign loans.

Senior analyst “Alpari” Vadim Iosub notes: in addition, the hryvnia “pressing” delay the currency of the tranche from the IMF in the amount of one billion dollars. The money must come in reserves of the NBU. Tranche from the IMF “discovered” the ability to obtain funds from other States and organizations.

Tranche from the IMF which the Ukrainian government had expected from the beginning of the year, received in September. After that, the dollar remained in the range of 25.5-26 hryvnia, and in December rose to 27,19 hryvnia.

That will be next year

Next year, the hryvnia in Ukraine will continue to decline against the American currency, experts believe. By the end of 2017, the national currency rate may reach the level of 30 hryvnia per dollar. Large amounts of currency have to spend to service public debt and the stability of the hryvnia including will depend on cooperation with the IMF.

According to the Executive Director of the international Fund blazer Oleg Ustenko, early next year the situation with the dollar to 27 hryvnia will not change dramatically. According to experts, by the end of 2017, the hryvnia will fall in price up to 30 hryvnia per dollar. “The course will be serious upheaval – to 30 hryvnia to the end of the year”, – said the expert. At the same time Oleg Ustenko notes, this scenario may “shake”, for example, the political crisis. In this situation, the forecast may be even less optimistic.

With the opinion of his colleague agrees the President of the Ukrainian analytical center Alexander Okhrimenko. “At the beginning of next year may be substantial growth rate. You will need to service the public debt, it matters. And, accordingly, the purchase of gas will be imported, is also affected. There may be some growth,” – says the economist.

Recall, as stated in the draft budget for next year, the rate of the national currency against the dollar in 2017 will reach 27,2 hryvnia. However, in the 2016 budget has laid a dollar 24,1 UAH.