Hryvnia Slides Again
Following a week-long stabilization preceded by the hryvnia strengthening, the Ukrainian currency started to devalue on the Interbank Currency Exchange. Monday trading opened at UAH 5.4050-5.4120 to the US Dollar, reaching UAH 5.4150-5.4200 by the end of the day.
The market closed Friday at the same level, with demand exceeding supply, Interfax-Ukrayina reports.
Operators on the currency market were not disturbed by the hryvnia’s slight fall, taking it as something normal. “No one had any illusions about the hryvnia staying firm. It was a natural fluctuation and the market returned towards strengthening the dollar,” Nadra Bank currency dealer, Dmytro Reznychenko, told Interfax-Ukrayina.
“It had to happen; the hryvnia cannot rise forever,” Reiffeisenbank Ukrayina’s treasury director, Serhiy Manokha, believes. In his opinion, the NBU was quite capable of maintaining the hryvnia but preferred to look the other way. One can conclude that a weaker hryvnia suits the NBU in the face of recent losses incurred by Ukrainian exporters during its rise.
The reasons given for hryvnia’s lower interbank exchange rate are different. “Several factors were vital for the dollar’s strengthening against the Hryvnia: first, thinner trade in the first half of May which was due to the long holidays along stepped up business activity in the second half of the month; secondly, the hryvnia exchange rate was influenced by the activity of Ukrainian energy importers who started purchasing hard currency in order to pay for their supplies,” VABank’s resource department head, Mykhailo Prianychnykov, told The Day.
Bank Forum deputy governor, Yaroslav Kolesnyk, links the hryvnia’s slide to the outcome of Viktor Yushchenko’s visit to the United States when it became clear that the IMF is going to take time with loans for Ukraine. Praveks-Bank’s cited named another reason: the hryvnia was affected by falling foreign trade revenue.
As Praveks experts stressed, the market remains the major regulator, which was amply evidenced by yesterday’s trading on the Ukrainian Interbank Currency Exchange: while a couple of days earlier the dollar rated at UAH 5.4250-5.4300, on May 16 it traded for UAH 5.4200, due to balanced supply and demand. The exchange rate will not drop below UAH 5.45 to the dollar on the interbank currency exchange, Praveks-Bank experts predict.
