In the first trades this year on the interbank market, the dollar is rising slightly. And over the past week, the dollar against the hryvnia in different segments of the foreign exchange market has changed differently. While the exchange rate of the National Bank of Ukraine gradually declined, in other market segments the dollar rose slightly against the hryvnia by 0.1-0.3%, according to senior analyst at Alpari Vadym Iosub.
Thus, since last Monday, the official US dollar exchange rate set by the National Bank of Ukraine has decreased from UAH 28.35 to UAH 28.27 (-0.3%). Demand / supply of the dollar on the interbank market, according to UkrDealing, increased from 28.29 / 28.32 to 28.33 / 28.36 (+0.1%) over the same period. The average buying / selling rates of the cash dollar in banks for the week increased from 28.15 / 28.40 to 28.19 / 28.50 (+0.2% / +0.3%). The spread between average sales and average purchases widened from 0.9% to 1.1% due to a faster increase in the selling rate compared to the purchase.
Bank of America analysts admit that the hryvnia will strengthen to UAH 26.0-26.5 in the first quarter of 2021 due to the return of non-residents in domestic government bonds. According to the investment bank’s report, the main drivers for the inflow of non-residents’ money are progress in the International Monetary Fund program, as well as general optimism in the markets. Bank of America analysts believe that non-residents may renew their portfolio of domestic government bonds to pre-crisis $ 5 billion from the current $ 2.6 billion. In the absence of new negative trends, such capital inflows could be a key support for the hryvnia in 2021. At the same time, the growth of currency purchases by the National Bank should prevent the possible strengthening of the hryvnia significantly above UAH 26 in the first quarter and justifies the investment bank’s forecast of an average annual exchange rate of UAH 27 in 2021.
Bank of America noted that the hryvnia is the most undervalued currency in the region.
At the beginning of the short working week, we expect a slight increase in the dollar against the hryvnia. The dollar can be traded on the interbank market in a week near UAH 28.4, and the cash dollar in banks can be traded around UAH 28.3/28.5.
Translation: Evelina Susyk