In the currency market of Ukraine, moderate activity is observed ahead of the winter holidays, which significantly differs from last year. Unlike previous years, when the demand for foreign currency sharply increased in December, this year the excitement is considerably lower.
This is reported by Finway
Seasonal Factors and Market Participants’ Behavior
As explained by Taras Lesovyi, the director of the Financial Markets and Investment Activities Department at Globus Bank, during the New Year payment period — particularly the receipt of bonuses and awards — the demand for cash currency traditionally increases. At the same time, some citizens may sell accumulated currency before the holidays to prepare for celebrations, which partially balances the market activity.
“In principle, this trend occurs every year with one exception: the number of sellers does not always equal the number of buyers. Overall, it is expected that demand will exceed supply by about 10–15%, which is a completely manageable level. For comparison, last year at this time, the excess reached 30–40%, creating additional pressure on the exchange rates,” said the expert.
Exchange Rate Forecast for the End of December
Taras Lesovyi emphasizes that this year the situation in the currency market is more stable due to low inflation and the absence of sharp economic fluctuations. According to the expert’s estimates, inflation for the year will not exceed 10%, and the National Bank of Ukraine currently does not plan to change its forecasts regarding the exchange rate.
From November to the end of December, major foreign currencies are showing slight, controlled growth. The National Bank of Ukraine retains the possibility of intervening in the market to compensate for excess demand through currency interventions, which helps avoid sharp exchange rate fluctuations. The difference between buying and selling currency in the interbank market remains minimal.
According to Lesovyi’s forecast, from December 22 to December 28, the currency corridors in the interbank market will be 42.2-42.7 UAH per US dollar and 48-49.75 UAH per euro, while in the cash market — 42.3-42.8 UAH per dollar and 48-49.75 UAH per euro.
Daily fluctuations in the interbank exchange rate are expected to be within 0.05-0.15 UAH, in banks — up to 0.1-0.2 UAH, and in exchange offices — up to 0.3 UAH. The average difference between the interbank rate and the cash market will be 0.1-0.15 UAH. A deviation in the exchange rate of 1–1.5% from Monday’s level is possible over the week.
Thus, ahead of the holidays, relative stability in the currency market is expected, and the regulator has all the tools to maintain a controlled situation.