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Translated by Ollie Richardson

20:00:35
17/11/2016

Korrespondent.net

Since the end of last week, the hryvnia fell in Ukraine.

On the black market, the hryvnia already hit 27, although a week ago it was worth 26 hryvnia for one dollar.

On the black market the average dollar exchange rate continues to show growth and is on sale for 27.61 hryvnia, and for purchase – 27.3 hryvnia.

Korrespondent.net interviewed regarding what to expect from this rate in the future.

The current rates

The National Bank of Ukraine set on Thursday, 17th November, 2016, the official exchange rates:

  • $100=2634,5680 hryvnia (+0,3339);
  • €100=2819,5147 hryvnia (+0,1934);
  • 10 Russian rubles = 4,0817 hryvnia (+0,0113).

Meanwhile, the dollar exchange rate in exchange offices on the morning of 17.11.16 hovered around UAH 27.1 in buying and UAH 27.2 to 27.6 sale.

On the black market the average rate of dollar now again shows growth and is on the sale at 27.61 UAH, and for purchase at 27.3 UAH.

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The average U.S. dollar exchange rate in banks on November 17th in comparison with yesterday also grew.

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Government’s position

The National Bank of Ukraine considers political instability as the cause of the weakening of the hryvnia.

The Deputy head of the National Bank Oleg Chury is sure that fundamental economic factors speak in favor of the Ukrainian currency.

“Although Ukraine continues to receive considerable foreign currency revenues from the export of grain and oil, and steel prices and iron ore prices in the global markets resumed growth, rising political tension causes nervousness on the currency market, eliminating the impact of these favourable factors,” said Chury, and warned that the situation could deteriorate in the event of the strengthening of political instability.

Continuation of growth

Economist Alexander Okhrimenko, commenting to Korrespondent.net, said that the National Bank and its close associates earn on currency fluctuations.

“The difference between the official rate and the black market is significant. The official rate is unrealistic. Currency is sold only for their own, and then the rest is sold, but for a different price. This has always been the case, not only under Hontareva,” says Okhrimenko.

According to him, so far the growth trend remains, but it is very difficult to predict the black market.

“The optimistic forecast – at the end of the year it will be 27, pessimistic – 30 hryvnia,” said the expert.

Project manager of the Financial Development League Andrey Blinov also believes that the hryvnia in the coming months won’t stop falling.

“If the situation will develop in the same way as it develops right now, it is quite possible that the exchange rate of hryvnia can fall to 27 or even 28 per dollar until the end of the year,” said Blinov in comments to “RIA Novosti-Ukraine”.

The expert doesn’t see sense in making plans for a longer period. “But so far the trend is such that there will be a slight devaluation during the remaining month and a half of this year,” sums up Blinov.

Devaluation is a government policy

According to the head of the Committee of Economists of Ukraine Andrey Novak, there are three factors that form the hryvnia exchange rate: foreign trade, balance of payments, and external debt.

“All three of these factors are positive, so there’s no reason for a devaluation, and there is even a basis for strengthening. But the unit devaluation planned by the government together with NBU proceeds. This confirms that the government, when it submitted the budget resolution at the beginning of summer, still established the dollar in 2017 at 27.2 hryvnia. Although at the time the rate was 24.5,” he noted, in comments to Korrespondent.net.

Novak believes that it is necessary for the government to ensure that due to devaluation state and local budgets are filled and to satisfy the appetites of exporters, who at the same time are both the main industrial and financial groups, and the owners of parliamentary power.

“It’s an easy road for the government, but a hard one for the population. A forecast of the hryvnia exchange rate now is impossible to create,” he stressed.

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