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
The National Bank of Ukraine (NBU) this week again increased net sales of foreign currency on the interbank market to $646.30 million from $624.49 million a week earlier, according to the regulator’s data. According to them, the central bank refrained from buying foreign currency for the third week in a row, while sales jumped from $624.49m to $646.30m.
The official hryvnia exchange rate rose by 17 kopecks over the week. – UAH/$1 to 41.0592 UAH/$1, while on the cash market the hryvnia strengthened by about 11 kopecks when buying – to 41.30 UAH/$1 and by 10 kopecks when selling – to 41.40 UAH/$1
Since the beginning of 2024, the dollar at the official rate has appreciated by 8%, or by UAH 3.05, and since the transition of the National Bank on October 3, 2023 to the regime of managed flexibility – by 12.3%, or by UAH 4.49.
Thus, this month the hryvnia managed to fall by 0.1%, or by 5 kopecks, while in July the official hryvnia exchange rate fell by 1.4%, or by 55 kopecks – to 41.0063 UAH/$1. In June, its decline slowed to 3 kopecks after weakening by 90 kopecks in May.
As evidenced by the data that the NBU managed to publish for this period, from Monday to Thursday the negative balance between the volume of currency purchases and sales by the population gradually widened from $5.96 mln to $36.63 mln.
Ukraine’s international reserves in July, according to preliminary estimates of the National Bank, decreased by 1.8%, or $572.3 million – to $37 billion 231.9 million, while net international reserves (NIR) fell by $3 billion – to $23.30 billion. According to the quantitative performance criterion (QPC) in the updated program of expanded financing of the EFF, Ukraine’s NIR at the end of September this year should be at least $28.8 billion, and at the end of the year – at least $26.3 billion.
At the same time, according to the Ministry of Finance, Ukraine received about $8.4bn of external financing in August. In particular, $4.5bn from the EU under the Ukraine Facility, of which $1.6bn is a grant, as well as $3.9bn grant from the US through the World Bank’s PEACE in Ukraine project.
