In February, the National Bank of Ukraine (NBU) reduced its interventions in the interbank market by $547.6 million, or 15.5%, to $2 billion 990.5 million, while the official hryvnia-dollar exchange rate fell by 0.8%, or 36 kopecks.
At the same time, in the last week of February, the National Bank increased its sales of dollars on the interbank market by $148.3 million, or 22.4%, to $809.5 million compared to the previous week, while the hryvnia strengthened by almost 0.2%, or 7 kopecks.
According to data from the National Bank, during the first four days of last week, the average daily negative balance of currency purchases and sales by legal entities increased to $117.9 million from $79.3 million during the same period a week earlier, totaling $471.4 million.
On the currency exchange market for the population, the negative balance for Saturday-Thursday also increased to $17.3 million from $16.4 million the week before, with non-cash currency sales exceeding purchases every day.
The official hryvnia-to-dollar exchange rate, which started last week at 43.2747 UAH/$1, ended the week stronger at 43.2081 UAH/$1.
The dollar exchange rate on the cash market also did not change significantly last week: as of February 26, the purchase rate was around 42.92 UAH/$1, and the sale rate was around 43.30 UAH/$1.
Analysts at KYT Group, a major player in the cash currency exchange market (Liberty Finance LLC), note that at the end of February, the spread between the buying and selling rates at bank cash desks and exchange offices is gradually narrowing and stands at around 0.4–0.5 UAH/$.
In their opinion, at the end of February, currency fluctuations were influenced not only by official reports on the labor market and inflation in the US and market expectations of the March 17-18 decision on the key rate, but also by US President Donald Trump’s speech to Congress on February 24: he praised his economic achievements and criticized the Supreme Court for its decision against his tariff policy, calling tariff decisions a key driver of the “economic turnaround.”
“In general, analysts do not expect the dollar to fall sharply in the near future, as the latest statistics indicate good economic prospects, and the majority forecast of an unchanged rate in March should support the dollar’s position,” the company believes.
In the domestic context, KYT Group draws attention to the gradual devaluation of the hryvnia throughout February and the role of the NBU, which maintains the balance of supply and demand through regular interventions, as well as news about international support for Ukraine and risks related to the energy sector.
According to their forecasts, in the short term (1–2 weeks), the base range of the dollar exchange rate will be 43.3–43.8 UAH/$1, with a probable tendency towards 43.5–43.6 UAH/$1, in the medium term (2–3 months) – 43.60–44.60 UAH/$1, and in the long term (6+ months) the devaluation trend will continue with a benchmark of 43.6–45.05 UAH/$1.
Related:
