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Why did the hryvnia fall?
The exchange rate of the Ukrainian currency ends in March below 28 hryvnia / dollar. On Tuesday, the hryvnia rose on the interbank market compared to the previous trading day, to 27.86 on the sell and 27.84 on the buy. While last week the hryvnia fell in price, at the end of the week it broke the mark at the 28 hryvnia / dollar auction. And this despite the fact that many experts expected a seasonal strengthening of the Ukrainian currency.
There are several factors that influenced the weakening of the exchange rate, say analysts interviewed by RBC-Ukraine. As Taras Kotovich, senior financial analyst at ICU group pointed out, investors are now not very inclined towards emerging markets, to which is added the repayment of government bonds and concerns about the worsening situation with the coronavirus in Ukraine . “And in this combination, the foreign exchange market received an equilibrium shift in favor of demand, which led to the next fluctuations in the exchange rate,” he said.
Dmitry Churin, head of the analytical department at investment firm Eavex Capital, believes that the main factor in the growth of the dollar is the general strengthening of the US currency against other world currencies.
“As confirmation of such trends, you can take the dynamics of the so-called dollar index (USDX), which is calculated based on the exchange rate of the dollar against six currencies, namely the euro (EUR), the yen (JPY) and the British pound (GBP), Canadian dollar (CAD), Swedish krona (SEK) and Swiss franc (CHF). Last week, the dollar index rose 1.3%. During the same period, the dollar rose against the hryvnia 1.0% to 28 UAH / dollar, “Churin noted.
April plans
If we talk about the forecast of the situation in the foreign exchange market in April, then, according to Taras Kotovich, over the next month the hryvnia exchange rate should strengthen in the direction of 27.5 hryvnia / dollar.
This, according to the analyst, will be facilitated by the expected resumption of the inflow of funds from non-residents in hryvnia government bonds, the effects of seasonal factors and favorable trading conditions.
While Dmitry Churin believes that in April there are prerequisites to expect a further weakening of the hryvnia. “Consequently, the next level is considered to reach the 28.5 hryvnia / dollar mark,” Churin summarized.
