The National Bank of Ukraine (NBU), in the absence of currency purchases, increased its sales on the interbank market last week by $123.8 million, or 20.0%, to $742.70 million, according to statistics from the regulator on its website. The data published by the regulator during this period indicate a change in the cash currency market: while on Monday sales exceeded purchases by $6.4 million, on Tuesday purchases exceeded sales by $6.8 million, and on Thursday there was a negative balance of $40.6 million.
‘Household activity in the cash market has been declining for the third month in a row: average daily demand fell from $41 million in February to $17 million in April. This indicates a decrease in panic sentiment, market saturation and/or the exhaustion of the population’s purchasing power against the backdrop of weak economic growth. Another factor could be the spring holiday cycle, which is a traditional period for selling foreign currency savings to celebrate and finance short-term vacations,’ commented KYT Group on the situation in the cash market.
The official hryvnia exchange rate strengthened in the first half of the week from 41.75 UAH/USD to 41.4706 UAH/USD, but weakened again to 41.7091 UAH/USD by the end of the week. Despite the increase in the negative balance, the exchange rate on the cash market did not change significantly, and over the weekend, the dollar even fell by 5 kopecks. The purchase rate fell to 41.40 UAH/$1, and the sale rate fell to 41.50 UAH/$1.
According to KYT Group experts, the dollar exchange rate will remain within a narrow range.
‘Short-term outlook (2-4 weeks): the most likely movement is towards 41.20-41.80 UAH/USD with minor deviations (±20-30 kopecks). Volatility is low, speculative demand is limited. Medium term (2-4 months): a correction to 42.00-42.50 UAH/$1 is possible in the event of increased imports, accelerated inflation or a weakening of external financing,’ the company predicts.
Source: https://interfax.com.ua/news/projects/1067965.html
currency sales, NATIONAL BANK, КИТ Group
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