Page 44 - BNE_magazine_02_2020

44 I Eurasia bne February 2020
investment has risen to over $4bn. That has sent the value of the hryvnia up by 17% in 2019, making it one of the best performing currencies in the world, but that in turn is hurting exports. The NBU started intervening in the FX market to contain the appreciation of the domestic currency, which broke through the UAH24 to the dollar mark in December – a level it hasn't seen for years.
In Kazakhstan, VTBC forecast inflation roughly flat to current prints and expects the headline inflation to remain at 5.4% y/y in 2020.
“We see moderation of food inflation to +6.6% y/y from almost 10% growth
in 2020, offsetting an uptick of services inflation from almost 0% this year to 4% in 2020,” Isakov said.
VTBC also predicts inflation to remain steady in Belarus in 2020 and slow somewhat to 5% y/y by the end of 2020, with the most visible slowdown in services inflation, from 8.0% to 7.2%, according to VTBC calculations.
“We generally see inflation lower
across the region, with the exception
of Russia, where we expect a pick-up
to 4% by YE20. We forecast the largest decline in inflation to be in Ukraine, while expecting Kazakhstan and Belarus inflation prints remaining roughly
unchanged,” Isakov said in a report.
Currencies in the KRUB countries are also expected to continue to strengthen somewhat as the battle against inflation progresses. “We expect $-KZT to remain roughly level and finish 2020 at 387, $-RUB to soften to closer to 63 by YE20, $-UAH to move to 25.3 and $-BYN to soften to 2.1. Overall, we expect all currencies, except $-KZT, to remain stronger in 2020 than in early 2019, preserving the support they received from expectations of lower core rates,” Isakov said.
Both Russia and Ukraine have started a monetary easing cycle that will
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