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Experts expect further depreciation of the dollar
The new week in the interbank market began with another collapse of the non-monetary dollar exchange rate: on December 14, it collapsed by 13 kopecks, at UAH 27.83-27.84 / $. After him, box office prices also plummeted: the average sale rate fell by 13 kopecks and the redemption rate by 10 kopecks:
- up to 28.0-28.20 UAH / $ – on sale;
- up to 27.75-27.90 UAH / $ – for purchase.
People began to sell the coin even more actively, anticipating its further price reduction.
Interbank trading was also carried out under the motto of selling currencies. The volume of transactions, according to Bloomberg, was reduced from 218 million dollars to 174 million dollars, but the whole game was played in one direction: towards the National Bank, which became the main buyer of dollars in the auction.
According to some estimates, NBU acquired 90 million dollars on the interbank market on December 14, according to others, 100 million dollars. He bought it at two rates: 27.85 UAH / $ and 27.84 UAH / $.
“Currency sellers trample on the dollar, while the only major buyer was the National Bank. The news about the additional placement of Eurobonds by Ukraine for 600 million dollars at 6.2% per annum and obtaining a loan from the World Bank for 300 million dollars they played to strengthen the hryvnia.Of course, on the placement of national government bonds tomorrow, for which non-residents need hryvnia (if they are offered a good yield and enter with a new large part of the government bond purchases), “Andrey Shevchishin, Forex Club’s chief analyst, told Strana about the mood.
Foreigners who started selling currencies under OVDP last week continued to be the main suppliers of the dollar in the interbank market. Exporters and everyone else followed suit. Because they understood that non-residents would strengthen the hryvnia.
“There are very few buyers of dollars. Banks went short and importers froze. They are waiting for the maximum collapse of the exchange rate and only after it takes something,” financial analyst Vasily Nevmerzhitsky told Strana.
The demand for currency forwards has increased significantly, allowing the current prices of the hryvnia and the dollar to be set for the future.
After the closing of the interbank market, the news was known that the National Bank had declared a small “Banco Misto” insolvent: due to the loss of a key asset and a fall in capital below the regulatory value.
This is a small structure, therefore its closure should not bring any significant damage to the financial market. Although, they say, several banks have recently lent it and will still incur losses from defaulting on interbank loans.
The key news for the interbank market remains the planned placement of OVDP by the Ministry of Finance tomorrow. If previous treasurers predicted that officials would sell securities for UAH 28-30 billion, today they even allowed this amount to be exceeded. After the government added to the 8 announced issues (seven in the hryvnia and one in the dollar) its ninth government bonds. These are 12-month government bonds denominated in euros.
“The Cabinet is interested in raising funds and, as you can see, it is interested in any resource, even in the euro currency. It is clear that the task is to collect the maximum in the debt market and take a smooth step towards 2021. No delay with VAT refunds and no budget hijacking “, – said Nevmerzhitsky.
For tomorrow’s OVDP placement, 11 banks at once attracted 5-year refinancing from Banco Nacional on Friday. And foreigners with power and the main currency to start and exchange for the hryvnia. All this together today has led to an increase in the balances in correspondent accounts of banks by more than half: from 58.3 billion UAH on December 11 to 88.98 billion UAH. They will decrease drastically immediately after the payment of the new government bonds, which will take place this Wednesday, December 16.
OVDP’s purchases of new issues will be accompanied by a further depreciation of the dollar. Tomorrow, December 15, the opening of the interbank market is expected within the limits of 27.78-27.82 UAH / $, while the treasurers allow the movement to the mark of 27.75 UAH / $ or even lower . The scale of the depreciation of the currency, as today, will depend on the National Bank, which will determine the rate of redemption of the dollar.
They believed in the euro for production
In today’s world market, the euro rate was growing: it rose from $ 1.2113 / € to $ 1.2157 / € after it was pumped within $ 1.2112-1.2177 / €.
Investors were pleasantly surprised by the eurozone report on industrial production growth for October of 2.1% (in monthly terms) versus the forecast of 2%. On an annualized basis, there was a drop in production, but much less than expected: in fact, by 3.8% against expectations at 4.4%.
There was good news in the US too: US President Donald Trump announced that the US Food and Drug Administration (FDA) had approved the Pfizer vaccine for use in situations of emergency. And he assured his people of the safety of Pfizer and Moderna vaccines.
However, this could not kill European optimism. Therefore, today traders were more actively selling the dollar and taking the euro.
In Ukraine, the euro cash rate was reduced by 10 kopecks:
- up to 34.05-34.25 UAH / € – on sale;
- up to 33.55-33.75 UAH / € – for purchase.
