The dollar rate in Ukraine will hurt growth – expert

The average annual devaluation of the hryvnia, which in 2016 15%, in 2017 will slow, and up to 10%. Such forecast was given today by the head of investment company Dragon Capital and President of the European business Association Tomas Fiala.

“This year, the expected devaluation in the single digits. The average rate may be in the range 27,5-28,5 UAH per 1 U.S. dollar”, – he said at a conference of the EBA in Kiev.

Fiala reminded that in 2016 the average annual hryvnia exchange rate weakened 25,55 of GRND $ 1, in 2015 to 21,83 UAH for dollar.

He also added that the national Bank is unlikely to allow the hryvnia to strengthen considerably above 27 UAH per dollar to keep the current account deficit within 3% of GDP and buy up the reserves of about 1.5 billion U.S. dollars.

Speaking about the growth of the economy, head of Dragon Capital predicted that its acceleration in 2017 to 2.5% from 1.8% in 2016.

As reported today, January 26, the official dollar exchange rate amounted to 27.2 UAH, a decrease compared to yesterday’s values at 3 a penny, and thus returning to the levels from two weeks ago. The dollar fell for six straight days.

Recall, experts say that the decline of the dollar was expected, but do not rule out a new increase in February.

At the same time, the national Bank of Ukraine (NBU) expects slowing inflation and lowering interest rates in 2017 and in the medium term.

Earlier, the NBU Council said the reasons for the collapse of the hryvnia. The NBU explained that the demand for foreign currency exceeds the supply under the influence of situational factors. And the Prime Minister of Ukraine Volodymyr Groysman assured that the devaluation of the hryvnia is seasonal.

Economists cite several reasons for the fall of the hryvnia: 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. According to experts, the rate stabiliziruemost after Feb.

  • In 2017, Ukraine’s Finance Ministry expects a rate of 27.2 UAH/USD. The head of the NBU Valeria Gontareva considers budgeted-2017 the dollar is realistic.
  • For 2015 , the hryvnia depreciated by half, and for 2016 , the hryvnia depreciated by 12.9%, entering the TOP 3 of the weakest currencies of the CIS;
  • According to the “big Mac index” , the dollar in Ukraine has to cost a little more than 8 UAH;
  • The historical maximum the official rate of the dollar – 30.01 UAH/USD. – was made in Feb 2015.
  • Analysts Bloomberg believe that the volatility of the hryvnia in the near future will be minor and Ukrainian currency will be the most stable of the analyzed in the review.