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Today the demand for the currency was low. Photo: Country
On December 8, the non-monetary dollar exchange rate rose 1 kopeck and the interbank market closed at 28.14-28.15 UAH / $. At the box office, the US currency lost between 5 and 10 kopecks, the average rates fell to:
- 28.25-28.45 UAH / $ – on sale;
- 28.0-28.15 UAH / $ – for purchase.
The demand for foreign exchange by the population remains low.
Citibank alarmed the interbank market
There was a very active trade in the interbank market. Transaction volume, according to Bloomberg, increased from $ 112 million to $ 144 million and the rate soared in different directions.
Not everyone expected Citibank, which normally buys the dollar, to go out and sell it today. There were rumors, of course, but there was no certainty. They say the city needed a hryvnia to buy national government bonds, which the Finance Ministry was placing today. Foreigners became buyers of long-term government bonds.
“The appearance of securities with a circulation period of 4.2 years in today’s auction of the Ministry of Finance and the appearance of non-resident banks as sellers of foreign exchange led to active sales of dollars across the market spectrum. As a result, the rate fell to 28.055-28.07 UAH / $. These levels revived buyers: the dollar rose first to 28.09-28.11 UAH / $, and at lunch time, to 28.14-28.15 UAH / $. After the results of the OVDP placement appeared, a correction occurred. The growth of the rate in the afternoon can be explained by the strong overselling of the participants “, – said the treasurer” Strana “, head of trading operations in the interbank market of Credit Dnepr Bank Yuriy Grinenko.
Overselling is a fairly common phenomenon in our interbank market; It happens when speculative banks like to buy / sell currencies. Today they went over the line buying the dollar when its rate fell. We classified the currency and its rate went up a bit towards the end of the trade.
Strana sources reported that among foreigners, Citibank and Raiffeisen Bank Aval were the most active buyers of new OVDP issues.
“Foreigners understand that the current dollar exchange rate is a peak, and it will never be higher. There will only be a cheapening of the currency. So now is the best time to invest in government bonds. After all, the subsequent strengthening will add to the coupon yield of the securities and gains on the difference in the exchange rate. ” This is why non-residents were looking at long-term government bonds today, “financial analyst Vasily Nevmerzhitsky explained to Strana about the motivation of non-residents.
Record Rate – Desperate Cabinet
In total, the Ministry of Finance attracted 15.96 billion UAH to the budget of the OVDP placement on December 8. This is slightly less than the high of two weeks ago, when national bonds for 16.8 billion UAH were placed on 24 November.
The most important thing in the current placement is profitability. It reached the annual maximum for long-term bonds: in OVDPs with an outstanding period of 4.2 years, the average rate was 12.04% per year and the maximum rate was 12.25% per year. The government has not paid as much in debt securities in 2020, this is the maximum. It confirms the absolutely desperate situation of the Cabinet and the huge “hole” in the budget. Which by the end of this year can reach 150 billion UAH.
A total of 7 government bond issues were sold. 6 hryvnia and a dollar:
- for 3.3 billion UAH – 3 months in hryvnia at 10% per annum;
- by UAH 2.8 billion – 4.2 years in UAH at 12.04% per annum;
- for 1.9 billion UAH – 12 months in hryvnia at 11.22% per annum;
- for 1,020 million UAH – 6 months in hryvnia at 10.49%;
- for UAH 824.4 million – 2.2 years in hryvnia at 11.67% per annum;
- for UAH 313.8 million – 3.5 years in hryvnia at 11.89% per annum;
- for $ 204.1 million UAH – 12 months in dollars at 3.79% per annum.
Experts assure that this is not the last purchase of government bonds by foreigners, who will continue to invest in our debt securities this month, as well as in 2021.
The National Bank has not appeared again today in the interbank foreign exchange market, and experts are sure that it will not enter the market soon.
“It does not make sense for the National Bank to play with the rise of the dollar now. This will not noticeably affect macroeconomic indicators. The regulator handed over the foreign exchange market to market makers and wants them to find a balance on their own. Participate in transactions of arbitration between them and with clients, so that self-regulation of rates occurs, “he said. Vasily Nevmerzhitsky.
Among the most active currency traders on the interbank market are now: Raiffeisen Bank Aval, Citibank, TAScombank, Alfa-Bank, Globus Bank, Industrialbank, Sberbank, Alliance Bank.
What will happen next to the dollar exchange rate?
Tomorrow, December 9, the treasurers admit a repetition of the fluctuation of the exchange rate in the interbank market. The start of trading is expected in the range of 28.12-28.14 UAH / $, after which a further strengthening of the hryvnia to 28.05-28.08 UAH / $ is allowed.
No significant demand for foreign currency is anticipated yet, despite the redemption of a large OVDP issue tomorrow, for UAH 10.4 billion. It is expected to be received by state banks, which are transferring funds to new government bond issues.
Until the end of December, the Ministry of Finance will make several major payments on various OVDP issues:
- December 10: $ 376 million, repayment;
- December 16 – 11.8 billion: UAH 10.3 billion – repayment and UAH 1.5 billion – interest (coupon);
- December 23: 655 million UAH, interest (coupon);
- December 30: 729 million UAH, interest (coupon).
Brexit puts pressure on the euro
The euro exchange rate on the world market lost ground after several days of growth: from $ 1.2141 / € yesterday to $ 1.2109 / €. Throughout the day, the rate moved on the stock exchanges between $ 1.2096-1.2134 / €.
On the one hand, traders positively assessed the aggregate growth of the EU economy registered today at 11.5% (in quarterly terms) and the increase in investor confidence in the German economy: from 39 points to 55 ( with a forecast of 45 points). But, on the other hand, they are concerned about the escalation in the EU’s Brexit negotiations.
The head of the European Commission, Ursula von der Leyen, announced the disagreements between the European Union and Great Britain on the future economic partnership. The transition period will end in three weeks, on December 31. The financial markets are therefore concerned about future trade relations between London and Brussels.
“Neither party is interested in holding out until the contract is rejected, but given the current state of affairs, this result is still quite real,” CMC Markets humor analyst Michael Hewson told the Wall Street Journal.
In Ukraine, the average cash exchange rate of the euro on December 8 was reduced by 5 kopecks on the sale and 10 on the purchase. The prices were in the following ranges:
- 34.25-34.50 UAH / € – for sale;
- 33.80-34.05 UAH / € – for purchase.
