Page 87 - UKRRptJul24

7.0 FX
Ukraine FX
Jun 2023
Jul 2023
Aug 2023
Sept 2023
Oct 2023
Nov 2023
Dec 2023
Jan 2024
Feb 2024
Mar 2024
Apr 2024
May 2024
Jun 2024
Currency (units per EUR) (average)
40.14
40.14
40.26
39.38
39.08
40.70
38.095
40.995
38.086
39.22
42.32
40.38
43.40
Currency (units per USD) (average)
36.90
36.90
36.92
36.92
36.12
37.20
42.074
37.737
41.298
42.3
39.45
43.90
40.52
source: NBU
According to the results of May, the National Bank sold $3.1B on the interbank market. This is the largest monthly volume of the regulator's interventions since the beginning of 2024. In May, the Ministry of Finance attracted only $20M from the World Bank and $132M from the placement of currency bonds. Therefore, according to the results of the month, experts estimate the reduction of gold and foreign exchange reserves to be more than $3B. If, at the end of April, the reserves amounted to $42.4B, now their volume will approach $39B.
Ukraine has a significant imbalance between exports and imports, how does this affect the dollar exchange rate? Oleh Hetman, the Economic Expert Platform's coordinator of expert groups, notes that because the exchange rate is not free-floating but in in a state of controlled flexibility, the national bank will try to adhere to the dollar price set in the state budget — ₴42 per $1. Therefore, it is not excluded that at the end of the year the price of the dollar will be in this range. "We receive $30-40B in aid yearly, which is more than enough to go to the interbank market and smooth out any fluctuations. So, there won't be any unexpected jumps," he said. The expert added that the regulator understands the current situation and that the country has a large trade imbalance. According to Hetman, the national bank chose a gradual and very mild hryvnia devaluation strategy to restore the balance between exports and imports. "Our imbalance has reached significant figures — the annual gap is about $30B. That's why gradual devaluation will help increase exports and reduce imports," Hetman explained.
87 UKRAINE Country Report July 2024 www.intellinews.com