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At the box office, prices in cash dollars remained in the same ranges. Photo: Country
On November 24, currency trading on the interbank market ended with an increase in the price of the dollar by 1 kopeck, to 28.36-28.37 UAH / $. At the box office, prices have not changed. Average cash rates remained in the following ranges:
• 28.50-28.60 UAH / $ – sale;
• 28.15-28.30 UAH / $ – buy.
Bankers note an increase in demand for the dollar in the regions, but speak of restricted purchases of foreign currency in Kiev.
The blockade killed imports and supported the hryvnia
Currency trading on the non-money market remains low in volume. The amount of transactions on the Bloomberg trading floor decreased from $ 85 million to $ 76 million, although Citibank, which serves foreigners, was noticed in the morning with purchases in dollars.
“Morning purchases from non-resident banks led to a brief growth to 28.39-28.40 UAH / $, but after closing we began to adjust to 28.37-28.38 UAH / $. Lack of demand in the cash market Black Friday and the close of the weekend contributed to a further drop in the non-cash rate, and by the end of the day the robes were already in the range of UAH 28.36-28.37 / $ “, said the treasurer, head of commercial operations in the interbank market of Credit Dnepr Bank Yuri Grinenko.
Of the main players, only foreigners were identified in the auction. There was no National Bank or NJSC Naftogaz on the interbank market. And importers weren’t actively buying the currency. That all the experts interviewed by “Strana” explained the expectations of greater quarantine restrictions by the authorities as of December 14.
“Companies have suspended the purchase of imported products due to the planned closure. If traders are prohibited from working, the products will remain on store shelves. No one needs them,” financial analyst Vasily Nevmerzhitsky said in an interview with Strana.
His colleagues also confirmed that traders are selling stocks and not making new purchases. Despite the upcoming New Year holidays.
“Importers are afraid to buy. There is no desire to ‘freeze’ money on a product if everything closes in 3 weeks. This is a strong deterrent to the hryvnia,” Andrey Shevchishin, head of the department of Forex Club analysis.
Dollar sales on the interbank market are also small now. Mainly due to VAT payments made by the State Treasury: on November 24, the company received 618.9 million UAH and the total amount of payments since the end of last week exceeded 1.9 billion UAH .
In total, in the framework of VAT refunds, it is expected to pay about 7-8 billion UAH. The slow payments of the State Treasury are explained by the lack of funds in the state budget, which is already being discussed not only by experts, but also by officials: that a single treasury account is a card index (a queue of late payments), and payments slow down. To understand the scale of the monetary deficit, it is enough to compare the balance of funds in the UCR: if at the beginning of November 2020 they amounted to 15.1 billion UAH, at the same time in 2019 – 53 billion UAH.
In the context of the discussion about the budget deficit, today there was an active rumor that the State Treasury would withhold VAT refunds. That won’t pay for everything, but only a portion of the amount. However, exporters still do not firmly believe in this gossip. That is, they do not sell the dollar and continue to wait for payments from the state.
This behavior of exporters and importers leads to a reduction in the volume of transactions in the cashless market.
“The trading volume in the interbank market has been reduced for two reasons. Importers are not in a hurry to buy dollars for purchases of goods for the period before the holidays due to the uncertainty with the lock, that is, the demand for foreign exchange it is not growing. And exporters are not in a hurry to sell their foreign exchange earnings due to the expected payments in VAT “, – confirmed Yuri Grinenko.
Borrowed a lot, but expensive
The key event for the financial market on Tuesday was the placement by the Ministry of Finance of new issues of national government bonds. It was able to immediately bring in the budget 16.8 billion UAH: 11.5 billion UAH + 157.7 million euros, a very solid amount. The biggest was not only in November (in the previous weeks, 1.96 billion UAH to 7.9 billion UAH were attracted), but overall throughout the fall. The last time the government managed to get more loans was on June 9, when government bonds worth UAH 17.8 billion were placed.
In total, the Ministry of Finance has sold 6 bond issues today. The most actively purchased short-term securities, to be extinguished in the first half of 2021:
• for 6.96 billion UAH – 6 months at 10% per annum;
• for UAH 3.4 billion – 9 months at 10.25% per annum;
• for 521.9 million hryvnia: 12 months at 10.75% per annum;
• for UAH 408.6 million – 2.5 years at 11.4% per annum;
• for 192.5 million UAH – 3.5 years at 11.7% per annum.
• for 157.7 million euros – 12 months at 2.45% per annum.
According to Strana’s sources, most of the major issues were bought by state banks, which were persistently asked to help cover the budget deficit. And also the banks that received a 5-year refinancing from the National Bank for UAH 16.1 billion a week ago.
“It appears that the securities were bought by banks that received refinancing from NBU. That, in principle, was expected,” Andrei Shevchishin said.
The hidden issuance of the hryvnia worked: the National Bank first issues its refinancing loans to the banks, and they buy government bonds for the funds received and finance the budget deficit.
Furthermore, this time the Ministry of Finance had to significantly increase the bond rates in order to transfer its debt securities. Performance increased as follows:
• on government bonds maturing on October 27, 2021: from 10.5% to 10.75% per annum;
• maturing on February 15, 2023: from 10.95% to 11.4% per annum;
• maturing on May 22, 2024 – from 9.99% to 11.7%.
That is, you will have to overpay the budget. But the Finance Ministry just didn’t get another chance to avoid default, because there are simply no free funds in the budget. Officials do not have enough money to pay for protected budget items. And tomorrow you have to make a very important payment from the old government bonds: repay securities for UAH 11.8 billion + pay interest for UAH 2.2 billion. That is, 14 billion UAH.
This is more than UAH 11.5 billion, which the government will receive from the placement of new securities today. So you have yet to report the hryvnia budget.
Issuance and new pressure on the hryvnia
In this situation, financiers were impressed by the statement of President Volodymyr Zelenskyy, who promised representatives of small businesses to pay 8,000 UAH as compensation for the closure. We are talking about compensation for 1 million Ukrainians. That is, an additional 8 billion UAH will be required, which, as you know, is simply not available in the state budget.
The only thing that funders hope is that funds will be attracted from external donors.
Yesterday it was learned that the Cabinet of Ministers will request a loan of $ 300 million from the International Bank for Reconstruction and Development (structure of the World Bank) as part of the program to combat the consequences of COVID-19. Our country received the first funding from the coronavirus program in the summer, for 350 million dollars, and now it will ask for a second. It is called precisely like this: “The second additional financing destined to overcome the consequences of the COVID-19 pandemic.”
$ 300 million is more than UAH 8.5 billion, that is, it should be enough to pay compensation. Yes, of course, everything is fine and Ukraine gets a loan. Otherwise, our authorities will have to resort to additional hryvnia issues.
“There are two options: external loans / assistance or your own pocket, which is empty. The authorities are negotiating with donors. But, as I understand it, there is no final decision yet. It is possible that an issuance mechanism or a hidden issue through OVDPs, “he added. Andrey Shevchishin said.
True, if Ukraine receives $ 300 million for new social payments, hryvnia will also be issued. The Ministry of Finance will receive dollars from the MBRD and sell them to the National Bank, that is, the NBU will buy $ 300 million for its gold and foreign exchange reserves and will transfer the equivalent in hryvnia to the government. The issue will be backed by the dollar, but will still take place.
The main question that will arise later is how these 8 thousand hryvnias will be spent. They will be invested in business, in the purchase of goods / services or in the purchase of currency, which Ukrainians like to do. Especially in tough times, as they say, on a “rainy day.”
“If there are purchases of goods, the new social payments can result in an increase in inflation. And they can also put pressure on the foreign exchange market and on the hryvnia exchange rate, if the population decides to transfer part of the compensation to the dollar.” admitted Vasyl Nevmerzhitsky.
What’s going to happen with the dollar?
However, this pressure on the exchange rate will start after the payments. For now, financiers are more concerned about the purchase of the dollar by foreigners, who tomorrow will receive government bond payments from the Ministry of Finance.
The opening of the interbank market on November 25 is forecast at a level of 28.34-28.38 UAH / $, after which the financiers admit the movement of the rate of 28.4 UAH / $ and more.
“The game to depreciate the hryvnia will follow non-residents and speculators, as well as importers of critical imports. Also, after the Black Friday sales, I think there will be equipment imports on the market that want to survive hard times in currency. foreign, not hryvnia, “he said. Andrey Shevchishin.
They came to believe in Europe
The euro exchange rate on the world market today jumped from $ 1.1842 / € to $ 1.1880 / € after oscillating between $ 1.1837-1.1894 / €.
Investors were impressed by the positive macroeconomic statistics from Europe. More precisely, the report on the German economy: its GDP in the third quarter of 2020 fell by only 3.9% compared to the forecast of 4.1%. And the business climate index in this country did not fall as badly as in October: not 101.4 points, but only 96.1.
Traders decided that not everything is so bad in the EU and today they were buying euros more actively.
At the same time, the spot prices of the European currency in Ukraine have not changed. Our market often lags behind price changes. On November 24, average cash rates were in the following ranges:
• up to 33.70-33.90 UAH / € – for sale;
• up to 33.20-33.40 UAH / € – for purchase.
