Business news from Ukraine

BANKERS PREDICT ABSENCE OF SHARP FLUCTUATIONS OF HRYVNIA IN JUNE

Alexey Blinov, head of the analytical department at Alfa-Bank, expects the stabilization of the hryvnia card rate for individuals in June and the preservation of the rates of exporters and importers.
“For June, we can predict the preservation of the rates of exporters and importers. As for the bank cash market for individuals, it has more or less stabilized and I don’t think that there will be such jumps that we saw this spring,” he said during the Finclub round table on Tuesday .
His opinion was shared by associate expert of “CASE Ukraine”, ex-deputy director of the financial stability department of the National Bank of Ukraine (NBU) Yevhen Dubogryz, who also noted the stabilization of the exchange rate compared to the jumps observed in the spring.
“It seems to me that we will have a creeping devaluation. Even if the NBU weighs this, there is still pressure on the hryvnia, since we have a war, problems with exports, with the fact that we do not receive the amount of funds from our partners, which we are very necessary,” the expert said.
He noted the existence of a small issue of the hryvnia, which affects inflation not directly, but through inflationary expectations.
“Over time, the NBU will change the course, of course, in the direction of the dollar’s rise in price,” Dubogryz pointed out.
As reported, on February 24, the National Bank suspended the work of the foreign exchange market of Ukraine, except for the sale of foreign currency, and fixed the exchange rate at the official level of that day – UAH 29.2549/$1, which led to the emergence of a “black” market, where in the first days the exchange rate reached 39-40 UAH/$1.
Later, the regulator allowed the sale of currency in branches under the threat of capture by the occupiers, by decision of their management, and from May 21, it canceled the upper limit of both the rate of selling cash currency by banks in Ukraine and the rate of converting the hryvnia into foreign currency on their cards outside the country. Previously, the ceiling for such an exchange rate was the official hryvnia exchange rate fixed on the first day of the war plus 10%, or UAH 32.18/$1. The ceiling for other currencies was calculated at the cross rate against the dollar.

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GERMANY IS LAUNCHING PROGRAM TO EXCHANGE CASH HRYVNIA FOR EUROS FOR UKRAINIAN REFUGEES

The Federal Ministry of Finance, the Federal Bank of Germany, German banks and the National Bank of Ukraine will launch a program for Ukrainian refugees to exchange cash hryvnia for euros on May 24, the press service of the German Ministry of Finance said.

According to the report, the Federal Ministry of Finance and the Federal Bank of Germany have signed an agreement with the National Bank of Ukraine on the initial volume of exchange of 1.5 billion UAH.

It is stated that refugees can exchange 100, 200, 500 and 1000 banknotes (up to 10 thousand hryvnias) for euros in German banks and savings banks participating in the program.

The conversion into euros takes place at the exchange rate published on the Bundesbank website (www.bundesbank.de/wechselkurse-ua), the report said.

The press service noted that the exchange will be registered in an online application submitted by the European Central Bank to ensure that the individual maximum amount of the exchange is not exceeded, for which the identity of each adult refugee wishing to participate in the exchange is recorded and verified.

It is specified that the exchange is initially possible within three months, and the losses resulting from the exchange are borne by the federal budget.

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MINISTRY OF FINANCE OF UKRAINE TOMORROW FOR FIRST TIME WILL OFFER BUYERS ENTIRE RANGE OF MILITARY BONDS – HRYVNIA, DOLLAR AND EURO

The Ministry of Finance of Ukraine at primary auctions on Tuesday, April 19, for the first time will offer buyers the full range of military bonds – both hryvnia and currency in dollars and euros.
According to the announcement of the Ministry of Finance, in particular, hryvnia military bonds with maturity in 6 months will be put up for auction. and 14 months, as well as 12 months. dollar bonds and 7-month. euro bonds.
Rates on these hryvnia bonds at the last auctions were respectively 10% and 11% per annum, on dollar bonds – 3.7%, and on euro bonds – 2.5% per annum.
As reported, the Ministry of Finance last week, at the seventh auctions for the placement of military bonds, was able to attract UAH 6.17 billion compared to UAH 0.96 billion a week earlier and UAH 3.33-4.88 billion in the previous three weeks. Currency notes were not offered last Tuesday.
The total volume of issuance of military bonds is up to UAH 400 billion. They can be bought by the National Bank, which has already purchased these securities under a separate procedure for UAH 40 billion.
At market auctions since March 1, their sales amounted to UAH 34.9 billion, $11.9 million and EUR143.4 million.

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THE EUROPEAN COMMISSION WANTS TO HELP UKRAINIAN REFUGEES IN EXCHANGE OF HRYVNIA TO EURO

The European Commission (EC) put forward on Friday a proposal for the recommendation of the EU Council on the conversion of hryvnia banknotes into the currency of the member states hosting Ukrainian refugees. “This proposal complements the humanitarian assistance provided by the EU to those who flee Ukraine, in particular when they move through the territory of the union, and it is fully consistent with EU law on asylum and foreign policy,” the EC communique published in Brussels reads. The document says that since the beginning of Russia’s invasion of Ukraine, more than 3.8 million people have arrived in the European Union fleeing the fighting. One of the urgent needs of refugees is the conversion of their hryvnia banknotes into the currency of the host country. “Today’s proposal aims to promote a coordinated approach for all Member States to offer those fleeing Ukraine the same conditions for converting their hryvnia banknotes into local currency, regardless of the Member State they are in,” the statement said. European Commission. Brussels explains that this approach was necessary due to the fact that the National Bank of Ukraine was forced to suspend the exchange of hryvnia banknotes for foreign cash in order to protect Ukraine’s limited foreign exchange reserves. As a consequence, credit institutions in the EU Member States are reluctant to make the exchange due to the limited convertibility of hryvnia banknotes. Some EU Member States are considering introducing national schemes that support the conversion of a limited amount of hryvnia per person, and the aim of the Commission, as the communiqué suggests, is to consistently promote such schemes. These schemes should include a maximum limit of UAH 10,000 per person, and the duration of such schemes should be at least three months.

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THE HRYVNIA EXCHANGE RATE EXCEEDS UAH 28/$1

The hryvnia exchange rate on the interbank FX currency market weakened to UAH 28.005/$1 on Friday from UAH 27.860/$1 on the previous business day, dealers of commercial banks has told Interfax-Ukraine.
According to them, the quotes of the national currency at the close of trading amounted to UAH 27.995-UAH 28.015/$1.
According to the data of the National Bank of Ukraine, the hryvnia reference rate on the interbank FX market weakened to UAH 27.94/$1 on Friday from UAH 27.70/$1 on Thursday.
At the same time, the regulator weakened the exchange rate of the national currency for January 17 to UAH 27.9514/$1 from UAH 27.7372/$1 the day before.

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ANALYSTS AT BANK OF AMERICA DO NOT EXPECT FURTHER STRENGTHENING OF HRYVNIA

Analysts at Bank of America (BofA) Global Research do not expect further nominal strengthening of the hryvnia, according to a June 14 BofA study.
The bank said that it is still constructive in relation to the International Monetary Fund (IMF), but the bank does not expect further nominal strengthening of the hryvnia, especially given the seasonality of the exchange rate in the third quarter, BofA said.

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