The dollar had a week to fully regain the growth of the hryvnia exchange rate in July and August. On the interbank market, the American currency has reached 26,02/at 26, 05 grn/$ – its best level in two months.
Bank exchange reacted instantly. According LIGA.net on Friday, the banks sold to the population the dollar low of 26.39 UAH.
A temporary worsening or hint at the long term trend? LIGA.net asked Ukrainian bankers and financial analysts how they see the hryvnia exchange rate at the end of this year.
The consensus forecast
The views of financial market participants are divided. Most analysts are cautious, with a maximum threshold of the fall of the hryvnia to 27.5 UAH/$ by the end of 2017. The most optimistic is 25.9 UAH/$.
Factors that will influence the hryvnia to fall quite traditional: more intense than in the summer purchases of gas before the heating season, the decline in sales of agrarians on foreign markets, and a necessary preparation of the NBU and the government to large repayments of external liabilities in the next year.
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Optimists do not see the prerequisites for a strong currency turmoil this year. Their opponents believe that the hryvnia exchange rate, as before, will be too dependent on external factors.
Hope for export
The reason for the September fall of the hryvnia – in gas purchases and the reversal cycle of Ukrainian agrarians, which now has reduced sales in world markets, says senior analyst, Adamant Capital Konstantin Fastovets.
“Sales reduced grain, corn just starting to collect in October-November, and oil seed in November is only going to factory processing, explains Fastivets’. – Receipts of foreign exchange in this period is traditionally lower.”
In General, the situation on foreign markets should suit the Ukrainian exporters: prices of cereals are lower than last year, but further signs of a slowdown are seen; the metals market, in contrast, has grown significantly, the NBU wrote in its inflation report.
“In the case of keeping the price situation on Ukrainian exports, in the year-end exchange rate may consolidate in the range of 26-26, 5 UAH/$, – said the Deputy Director of the Department of Treasury and international business at Pivdennyi Bank Oleg Ropac. – If the situation on foreign markets will not be favorable, can see the course and above 27”.
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If exporters devaluation is theoretically favorable, the NBU is not interested in excessive depreciation of the hryvnia because of the threat of inflation, said Konstantin Fastovets. “We already see that in the range 8±2%, the national Bank will be difficult to fit in, he explains. – To allow inflation accelerated more due to the devaluation of the regulator just can’t, he’ll have to intervene”.
Another important point is the exchange rate of the dollar against foreign currencies, said a senior analyst at Alpari Vadim Iosub.
“Our forecast 26 – 27 UAH/$ made with the assumption that the current ratio of the dollar to other world currencies will not change dramatically. explains Iosub. – The exact value of the dollar against the hryvnia will depend on the monetary policy of the world controllers. Without this, the global dynamics of the dollar unpredictable”.
Critical situations for the hryvnia this autumn will not be in the near future, the dollar may again revert to the summer values, the Director of Treasury Bank Credit Dnepr Oleg Kurinnoy.
“In the autumn the range of fluctuations will depend on the results of the grain harvest and exports. says the Colonel. – Extreme take-off rate will be. Probably, initially the rate will decline, but by the end of the year, the hryvnia may strengthen”.
Debts inspire fear
The experts from the other camp believe that before the end of the year more important for Ukraine is the issue of external funding.
“Relatively optimistic, the range of 29-29,5 UAH/$ by the end of the year is possible under condition of placing of Eurobonds and receiving a tranche from the IMF – the Director of Department of market researches of the IBI-Rating Agency Viktor shulyk. But there is a more pessimistic scenario in the case of “open default” on sovereign obligations (loan Russia $3 billion)”.
An additional threat to of course create the international courts of Ukraine, says szulik. In London ideal processes associated with Eurobonds Private Stockholm arbitration between Naftogaz and Gazprom. Another factor is the negative predictions for income from exports of services (gas transit, transportation of goods with the involvement of “Ukrzaliznytsya” and the Ukrainian ports) and remittances in case of introduction of a visa regime with Russia (if Russia will mirror the Ukrainian).
Another serious problem is the negative balance of the balance of payments of Ukraine, which is exacerbated by large external payments in 2018, says a senior analyst at Forex Club Andrey Shevchishin.
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“The national Bank is not worth while to reduce the discount rate due to inflationary risks. It is more important to regulate the free liquidity on the market and to prevent concentration in short periods of time, tax refunds, government procurement and other large budgetary expenditures, – the Shevchishin. – All the money can go to the foreign exchange market, especially during strong exchange rate fluctuations”.
Threatens local and traditionally non-transparent distribution of balances by budget, unused during the year, the analyst said Danish investment Bank Saxo Bank Feliks Indenbaum, and the preparation for the repayment of old debt will reduce the ability of the NBU to protect the hryvnia.
“The volume of external payments by 2018 will not allow the national Bank to actively spend reserves to maintain the exchange rate, though the regulator will be forced periodically to intervene, says Indenbaum. – Therefore, with great certainty can be argued that the revaluation of the hryvnia is unlikely to continue.”