Blockade in the Donbass and the IMF: the experts identified the main risks for the hryvnia in July

Selling rate of non-cash dollar in Ukraine in June fell by 1.1% to 26,02 UAH, cash – by 0.9% to UAH 26,12. Such data are information-analytical center of Forex Club.

The fall of the dollar in Ukraine is largely based on external factors such as the U.S. dollar index (the dollar against a basket of world currencies) in June decreased by 1.4%. The pressure on the currency had a weak macroeconomic statistics and the lack of progress in the promised Donald trump reforms, experts explain.

At the same time, trends in commodity markets retain a negative impact on the hryvnia. Wheat prices beginning in the second quarter fell by 0.3%, barley – 6.8%, corn – rose 1.1%, sunflower oil – by 2.3%. Iron ore and metallurgical products fell by 29% and 5%, respectively. Given the decline in not only prices, but also exports, we can expect the reduction of foreign inflows into the country, experts say.

FORECAST. In July, during a period of low business activity, the currency market will react to General trends in the economy, and the balance of supply and demand, experts say. Likely, the market will be dominated by the mood of the devaluation, and the hryvnia will gradually devalue against the background of deceleration of economic recovery, the blockade ORDO and poor performance of the agricultural sector.

Blockade ORDO and nationalization of enterprises on non-government controlled areas continues to constrain the industry, analysts said. The average annual rate of decline of production in industry in February–may reached 6.3%, in coke to 24.5%, in the mining industry – of 9.3%. The findings of experts are confirmed by the statistics of the NBU, which says that the negative impact of the blockade on the economy has not been exhausted.

“Cooperation with the IMF and other lenders remains a critical component for the stability of the hryvnia, and also allows you to rely on access to foreign capital markets for the restructuring of future payments on the external debt. If the cooperation with the creditors will stop devaluation sentiments will increase,” adds senior analyst at GK Forex club Andrey Shevchishin.

Additional pressure on the hryvnia, according to the expert, can be expected in the case of strengthening of the American currency on world financial markets.

According to analysts, the dollar exchange rate in the cash market in July may be in the range of 26 – 26,75 UAH. In the case of the growth of devaluation sentiments and external negative factors, can reach to 27.2 UAH.

The average selling rate of cash Euro in Ukraine in July, on the basis of the baseline scenario, may be of 29.6 – 30.5 UAH. The main influence on the dynamics of the Euro will provide macroeconomic indicators in the Eurozone and the dynamics of pair Euro/dollar.

The selling rate of cash ruble in July may be at 0,43 – 0,45 UAH. The main trigger of movement will be the exchange rate of the ruble against the dollar and the dynamics of world oil prices.

We will remind, according to the calculations of the national Bank, during the first half of 2017 , the hryvnia has appreciated against the dollar by 4%. Thus for 2015 , the hryvnia depreciated by half, and for 2016 devalued by 12.9%, entering the TOP 3 of the weakest currencies of the CIS.