In July, the National Bank of Ukraine (NBU) increased its sales of foreign currency on the interbank market by $873.6 million, or 30.9%, to $3.69 billion, according to statistics on the regulator’s website.
According to the statistics, the National Bank’s purchases of foreign currency in July fell to $0.83 million from $1.2 million in June, and last week the NBU’s foreign exchange interventions decreased by $171.9 million, or 21.2%, to $639.6 million compared to the previous week.
In July, the official hryvnia to dollar exchange rate strengthened from 41.7788 UAH/$1 to 41.7662 UAH/$1.
In the cash market, the hryvnia exchange rate strengthened by almost 13 kopecks over the month: buying at around 41.48 UAH/$1, selling at 41.58 UAH/$1.
“In July, the dollar to hryvnia exchange rate continued to demonstrate high stability with insignificant intraday volatility that did not turn into trend movements,” said experts from KYT Group, a major participant in the cash foreign exchange market.
They point out that the exchange rate fluctuations do not exceed 0.2%, which indicates an extremely restrained market reaction – especially given the announcement of important macroeconomic signals.
In their opinion, in the short term (one to three weeks), the corridor of 41.40-42.10 UAH/$ will remain in place in the absence of external shocks or surges in demand from importers.
KYT Group analysts expect that in the medium term (up to three months) the exchange rate may gradually shift to 42.30-42.80 UAH/$ in the face of the traditional growth in budget expenditures in the second half of the year, increased imports, or the implementation of the expected September Fed rate cut, which will lead to a correction of the dollar.
In the long term (over six months), experts predict a controlled devaluation trend. According to the baseline scenario, the exchange rate is expected to be in the range of UAH 43.00-44.50/$, provided that the current level of international support, stable reserves, and no unexpected shocks, especially those of a non-economic nature, are maintained.
