The first months of the winter are preparing for Ukrainians unpleasant “surprises” – traditionally this season is expected devaluation of the national currency. So, in the near future, the dollar in Ukraine may be sold at 29-30 hryvnia, economists say. The reasons for the “fall” a few: the demand for commodities decreases, the Ukrainians earn less at the expense of exports, in addition, dollars have to be spent on the purchase of energy resources and the repayment of loans. The website “Segodnia” find out what to expect from the currency market in Ukraine.
Why the dollar rises in price
Falling business activity. One of the main reasons for hryvnia devaluation – the drop in economic activity, mostly farmers. The fall in revenue from export crops of agricultural products were much higher. Traditionally, the first months of winter, the activity falls, reduced foreign exchange revenues. The less export revenue – more than the dollar in Ukraine.
“Less revenues from the export of the harvest of agricultural products, which were the main source of foreign currency in the autumn months. At the same time, the principal source of foreign exchange earnings gradually takes over steel exports,” – said Deputy head of the national Bank Oleg Capri.
Another reason for the decline in business activity on the market – a prolonged weekend in China (Chinese New year begins on January 28 and will be celebrated 15 days), said the head of analytical Department of Concorde Capital Oleksandr Parashchiy. Because of this there is a decline in the markets of ore and steel products exported by Ukraine.
The currency will have to spend on repayment of loans. “In January we have to pay the IMF loan and to pay interest on state debt,” – says President of the Ukrainian analytical center Alexander Okhrimenko. According to the expert, repayment will have to spend about $ 800 million. These funds can take the gold and foreign exchange reserves of the country.
According to Okhrimenko, it is also planned that the loan will repay a new loan. “At the moment the main thing – the debts. There were plans that in the beginning of this year, Ukraine will receive a new loan from the IMF and the government due to the new loan to repay the old one. And now it turns out that the loan was not given, it is possible to repay at the expense of foreign exchange reserve reserves, or at the expense of their sources,” says President of the Ukrainian analytical center.
In addition, according to Alexander Parade, the currency will also impact the need for purchasing energy abroad. According to Prime Minister Vladimir Groisman, if Ukraine as a result of energy efficiency and increasing domestic production of gas declined from energy imports, the hryvnia exchange rate could retain at the level at 18.5 hryvnia. “I saw a dimension that shows, if we had extracted gas in Ukraine, and didn’t buy it for hard currency, the dollar would be today, with all the problems that we have would not be worth more than 18.5 hryvnia,” – said the Prime Minister.
“I saw a dimension that shows, if we had extracted gas in Ukraine, and didn’t buy it for hard currency, the dollar would be today, with all the problems that we have would not be worth more than 18.5 hryvnia,” – said the Prime Minister.
The beginning of the year, according to economists, traditionally a difficult period for the hryvnia. In 2015, the national currency in the first two months dropped from 24.9 to 30 hryvnia for the same period last year – from 16.6 to 20 hryvnia. In the same year, experts predict, in January-February possible devaluation from 27 to 28.5 hryvnia. And in the worst case scenario – and up to 30 hryvnia per dollar.
If the national Bank will use to repay foreign currency loans reserve, the dollar, according to Okhrimenko, will remain in the range of 27 hryvnia, the NBU will decide to buy the currency market, the rate will jump to 28.5-30 hryvnia. According to Oleksandr Parashchiy, in January, the rate can go up to 28.5 hryvnia per dollar. According to the Concorde Capital forecast, the dollar in Ukraine will cost the average for the year 28 USD.
Financial analyst Yegor Perelygin sure that by the end of the year the hryvnia exchange rate against the dollar will fall to 30-31 USD.
The national Bank promises to “save” the hryvnia
“The national Bank is ready to enter the market with currency interventions to smooth excessive fluctuations and has enough tools for this. The volume of international reserves at the beginning of January amounted to 15.5 billion dollars. This is for the sale of currency in the course of the intervention, and to perform the obligations of the government and the NBU,” – said Oleg Capri.
Infusion of foreign exchange of the national Bank allow to increase the dollar supply in the market. The ratio of supply and demand determines the exchange rate. On 13 January, the NBU announced the auction for the sale of foreign currency. The volume of auction – $ 100 million.
After February the exchange rate of hryvnia stabiliziruemost. “After February, the hryvnia will be strengthened and will gradually go to the level of 28.5 hryvnia to the end of the year. Obviously, in the course of impact of news about the next tranches of the IMF. February 17 should be a court of “credit Yanukovych,” there can be negative surprises. Another major factor is the result of a judicial proceeding “Naftogaz” and “Gazprom” (to be in the first half),” – says Aleksandr Parashchiy.
In the coming weeks, the hryvnia is likely to be strengthened, and the dollar will decline on different segments of the currency market approximately 0.5 hryvnia, says a senior analyst “Alpari” Vadim Iosub. Devalvatsia of the hryvnia this year connected with the return after the holidays on the currency market importers currency auctions.
The hryvnia will gradually decrease to 28 per dollar by the end of the year, I’m sure Vadim Iosub. The dynamics of the currency will largely depend on the pace of reforms and related with that the next tranches of the IMF loan.
Financial analyst Yegor Perelygin noted that to date the Ukrainians have no alternative to preserve purchasing power, excluding purchases of foreign currency.”For more than 25 years of our independence, the population has no hedging instrument. To cut down at the root, you need to start with fundamental reforms: to create and develop the stock market, the normal foreign exchange market, to regulate banks more strictly, develop the rule of law and financial literacy. If you do the cleaning of the banking sector, do it quickly”, – the expert believes.