Page 49 - UKRRptSept22

7.0 FX
Data Google sheets import from here
https://docs.google.com/spreadsheets/d/1bMH5wBwqnIm_vgMxUi3yYkbBSPHhpqXBSJoylo7Fcko/edit#gid=1439190 079
Ukraine FX
Aug 2021
Sept 2021
Oct 2021
Nov 2021
Dec 2021
Jan 2022
Feb 2022
Mar 2022
Apr 2022
May 2022
Jun 2022
Jul 2022
Aug 2022
Currency (units per EUR) (average)
31.5
30.6
30.6
30.2
30.8
31.92
33.72
32.67
32.04
31.40
31.20
30.41
37.36
Currency (units per USD) (average)
26.8
26.4
26.4
26.5
27.2
28.42
30.07
29.50
29.63
29.69
29.54
31.52
36.92
source: NBU
The hryvnia’s purchasing power will drop by at least half.According to the head of the National Bank, Kyrylo Shevchenko, even the current 22.2% consumer inflation per year is a significant reduction, by almost a quarter, of the real disposable income of citizens. According to the NBU's forecast, inflation will exceed 30% in 2022, decrease to 20% next year, and only in 2024 might decrease to a single-digit level. Thus, over these three years, the purchasing power of the hryvnia will decrease by almost half. Shevchenko also said that even this scenario will require a lot of effort to bring about because the war’s results on the economy could be much worse. In addition, it is necessary to reduce the devaluation of the hryvnia and take measures to reduce the budget deficit, "no matter how unpopular these measures look." Otherwise, the head of the NBU predicts that Ukraine will slide into a permanent crisis with an inflationary-deflationary spiral.
The inflow of labour migrants’ foreign currency to Ukraine is decreasing.
The volume of private transfers to Ukraine from abroad in July 2022 amounted to $1.16B. According to NBU data, this is 1.2% less than the $1.18B in the previous year's corresponding period. In the seven months of the current year, Ukraine received $7.61B, 5.7% less than the figure for the same period in 2021, $8.1B. As a reminder, labour migrants transferred a record amount of $15.026B to Ukraine last year. This exceeded 2020’s figure, $11.980B, by more than 25%. In July 2022, the National Bank lowered its forecast for the volume of private transfers to Ukraine by the end of the year from $16.2B to $12.6B.
Though the Ukrainian currency, the hryvnia, has held up remarkably well since the beginning of the war, the Ukrainian Central Bank (NBU), under pressure, ended up announcing a 25% devaluation of its currency, further aggravating the economic crisis facing the country. “The decision is painful, and it will impact Ukrainians, but it was impossible not to take it,” Maria Repko, deputy director of the Centre for Economic Strategy told The New Voice of Ukraine.
49 UKRAINE Country Report September 2022 www.intellinews.com