Page 46 - UKRRptJul19

The document assumes that the average exchange rate will amount to UAH27.4/$in 2019, UAH28.2/$in 2020, UAH29.4/$in 2021 and UAH30.0/$in 2022. The exchange rate will reach UAH28.0/$at the end of 2019 and will increase to UAH30.7/$by the end of 2022.
The strategy on state debt management is an important document that demonstrates significant progress of Ukraine’s government in mid-term planning. The indicators of state debt-to-GDP for the nearest four years should serve as a guide for budget and state debt policy development. In addition, the macroeconomic indicators outlined in the strategy will serve as evaluation criteria for government performance.
The strategy presents quite an optimistic view on the development of Ukraine’s economy. The acceleration of economic growth from 2.8% y/y in 2019 to 4.1% y/y in 2022 implies the implementation of effective reforms that should result in continuing growth of private consumption, and more importantly, boosted investment. According to the strategy, the annual depreciation of the national currency will not exceed 5% in 2019-2022, which is in line with our vision of the exchange rate trend for the mid-term.
7.0 FX
Ukraine central bank cancels compulsory sale of FCY receipts by exporters. The National Bank of Ukraine (NBU) decided to cancel its regulation on the compulsory sale of 30% of foreign currency (FCY) receipts by exporters starting June 20, its press service reported on June 18. "This one more easing on the ForEx will not have negative consequences for macrofinancial stability," the central bank said in its statement. The NBU noted that Ukraine’s exporters currently sell around 90% of their FCY receipts on the ForEx. Since the beginning of the year, the regulator has canceled more than 30 ForEx restrictions in adherence to its road map on ForEx liberalization. This is the latest positive move by the NBU in its ForEx liberalization campaign. Removing the compulsory sale of FCY receipts will give Ukrainian exporters complete flexibility in their cash management. At the same time, the deregulating action reflects the NBU’s increasing confidence in the country’s macroeconomic stability. This measure also should add some points to the country’s Doing Business rankings.
46 UKRAINE Country Report July 2019 www.intellinews.com