A record increase in demand for foreign currency among the population has been recorded in Ukraine. According to financial analyst Andriy Shevchishin, demand has risen by 20%, while supply has only increased by 1%. This has led to a significant shortage in the currency market and has affected the exchange rate dynamics of the hryvnia at the end of October.
This is reported by Finway
Dynamics of the Hryvnia Exchange Rate and Key Trends
According to Shevchishin’s estimates, during the last week of October, the hryvnia will continue to gradually depreciate against major foreign currencies. It is expected that the cash exchange rate of the hryvnia to the dollar will remain in the range of 42.75–42.95 UAH/USD, while on the interbank market, the rate against the euro could reach 49 UAH/EUR. The cash rate against the euro is projected to approach 49.6 UAH/EUR.
The analyst emphasizes that the situation in the currency market is manageable, and the National Bank of Ukraine plays a key role in regulating the devaluation processes.
“This is a controlled devaluation under the supervision of the Central Bank. There will come a moment when the NBU will say – stop, because this is turning into panic and the devaluation is very rapid, or it starts to significantly affect the attractiveness of the hryvnia and puts pressure on inflation. But only the NBU knows where that stop is,” he notes.
Current Market Situation and Impact of External Factors
According to the analyst, the average daily deficit of cash currency operations has reached a maximum since February – 41.7 million dollars, which represents a 71% increase. The activity of cashless currency transactions has also increased: demand is rising while supply remains stable, although the surplus has decreased from 4.1 million dollars per day to 2.9 million dollars per day.
Hanna Zolotko, director of treasury operations at Unex Bank, notes that the currency market will remain volatile in the near future, but sharp instability is not expected. She believes that the fluctuations in the exchange rate are likely to be wave-like, and the market remains sensitive to news and significant financial events.
At the same time, according to the banker, one of the main factors for the stability of the hryvnia remains timely receipt of international aid. If these funds arrive on time, the hryvnia may strengthen slightly. In the event of delays or the emergence of new geopolitical risks, short-term fluctuations in the exchange rate may occur, which are likely to be smoothed out by the regulator and the market.