Recently, the hryvnia rate has strengthened confidently. In particular, the dollar in Ukraine on February 11 weakened by another 6 kopiykas, to UAH 26.89 per dollar (at the rate of the National Bank of Ukraine), the Ukrainian news outlet Glavred wrote.
The dollar rate decline is also observed in the global markets, which is caused by the trade war between the U.S. and China and the fall in the yield of 10-year U.S. Treasury notes.
However, the weakening of the dollar is likely to continue only until March, both in and outside Ukraine, the publication said.
Forex rates before the elections in Ukraine
The United States and China shall conclude a deal before March. The presidential elections in Ukraine are scheduled for March 31, after which the current government will no longer have a reason to prop up the hryvnia.
Economist, financial analyst Oleksiy Kushch says in early 2019, the hryvnia would have to weaken as was the case in January-February last year.
“The presidential administration wasn’t willing to come to the ballot boxes against the backdrop of a weakening hryvnia and calm the voters down with boring explanations, saying ‘don’t worry, the hryvnia will get stronger as usual in spring and summer,'” the expert said.
According to Kushch, March may be a favorable month with the growth in pensions, the monetization of subsidies and a strong hryvnia.
“Not even that. Let the hryvnia not only be stable, but also strengthen, proving to all skeptics that the ongoing ‘reforms’ are inevitable. Well, nobody cares about the fact that the rate after such manipulations may soar above the usual level, devaluing the increased pensions. The elections are around the corner. As for the [hryvnia] rate, there is a lot of time until the autumn, and there will be much speculation about its ‘stabilization’ after the presidential elections. They even promised more significant stabilization in 2014 [Poroshenko was elected president in May 2014],” he added.
Forex rates after the elections in Ukraine
Economist Andriy Novak predicts the hryvnia will weaken after the presidential elections in Ukraine. He mentioned that the national budget for 2019 envisaged the hryvnia rate at UAH 29.4 per dollar.
The expert added that before the parliamentary elections, the government would again demonstrate a slight strengthening of the national currency.
The dollar rate in Ukraine after March 2019 is expected to be UAH 28-29, according to TV Channel 24.
Experts name two reasons:
– An increase in import purchases;
– An increase in external debt payments.
The hryvnia emission (issuance of new banknotes) will expand due to a slowdown in economic growth and an increase in the state budget deficit.
As UNIAN reported earlier, a new law of Ukraine on currency and forex operations, which lifts over 20 restrictions on the country’s forex market, came into effect on February 7.