The National Bank of Ukraine (NBU) has significantly increased the dollar exchange rate over the past month, which may cause concern among the population and economic experts. According to the latest data, this week the non-cash dollar exchange rate on the interbank market reached 40.67 UAH/$ and fell to 40.47 UAH/$, and trading on the Bloomberg platform ended at 40.55 UAH/$. This decision by the NBU is causing questions about the possible consequences for the Ukrainian economy and consumer inflation.
Over the month, the official dollar exchange rate increased by almost 1 UAH (99 kopecks): on May 1, it was 39.5151 UAH/$, and on the 31st, it was already 40.5001 UAH/$.
The American currency also appreciated by almost 1 hryvnia in May, if you look at the dynamics of non-cash quotes on Bloomberg - from 39.57 UAH/$ to 40.55 UAH/$.
All this happened on a noticeable increase in demand for the dollar.
Today, the trading volume on Bloomberg amounted to $178.7 million, this week – $1.3 billion, for the month – $4.2 billion. Most of this demand, as before, was covered by the National Bank from its reserves. According to a preliminary estimate, in May it sold more than $3 billion on the interbank market, although in April it was only $2.3 million. So, based on the results of the month, we can see a new reduction in the NBU's gold and foreign exchange reserves, the total volume of which in April fell by 3.1% – to $42.4 billion.
Several times during May, large foreign exchange purchases were made on the non-cash market for Ukraine's military purposes, but demand from businesses also increased - both for current import needs and due to the lifting of a number of currency restrictions. First of all, those that allow companies to more freely repay old loans to foreign partners/financial institutions, which was prohibited immediately at the beginning of the great war (by Resolution No. 18 of the National Bank of Ukraine dated February 24, 2022).
In the last week, banks have also noted an increase in demand for dollars from the population. Ukrainians have become more active in buying cash dollars at cash desks as their price increases and non-cash dollars on cards. At the same time, conversions of hryvnia deposits into foreign currency have become more active as their terms expire.
Banks believe that the NBU may try to fix the hryvnia at current values in June, citing the average annual exchange rate of 40.7 UAH/$, laid down in the Ukrainian state budget for 2024.
"40.7 UAH/$ is the average rate for the year, not the limit, and in theory the interbank rate may even exceed 41 UAH/$, but the price tag should still roll back. We are observing devaluation in jerks: at first the rate stagnates for a long time, and then it collapses in a matter of weeks. Everything is happening under the control of the National Bank, and therefore, with its approval. They say that this is being done to increase tax revenues from exporters, more profitable conversion of international aid and under pressure from the IMF, which demanded that our Cabinet not only wait for infusions from external donors, but also actively use internal sources. In particular, through devaluation. However, all this must be done in a balanced way so as not to accelerate inflation too much, since the growth of the dollar exchange rate turns into a rise in prices, for which the NBU is responsible, and together with the increase in electricity tariffs, we can see a noticeable deterioration of this indicator. "Therefore, in June, the National Bank will probably try to slow down the appreciation of the dollar, otherwise it will be difficult to slow down inflation later," the chairman of the board of one of the banks analyzed the situation for "Strane".
On the black market, the dollar selling rate rose today from UAH 41.0/$ to UAH 41.04/$, and the buying rate rose from UAH 40.3 to UAH 40.5/$. Here, the currency has appreciated by UAH 1.2 since the beginning of May, because on May 1 it could still be bought for UAH 39.8/$.
In bank cash desks, the average selling price of a cash dollar at the beginning of May was 39.90 UAH/$, and the maximum was 40.1 UAH/$. Today, May 31, the average rate was 41.11 UAH/$, and the maximum was 41.40 UAH/$, while the currency was redeemed within the range of 39.40-41 UAH/$.
The two largest state-owned banks, Privatbank and Oschadbank, set the buying/selling rates at 40.50-41.10 UAH/$ and 40.50-41.15 UAH/$, respectively.
The maximum card selling rate at banks this Friday reached 41.55 UAH/$, set by Acordbank, and the minimum was 40.85 UAH/$ at Ukrgasbank. The buying range was 39.90-40.95 UAH/$.
