At the beginning of 2024, the active influence of the National Bank on the currency market of Ukraine is expected to continue, while the hryvnia will gradually weaken. According to experts' forecasts, on the interbank market the exchange rate of the dollar may fluctuate between 37.70-38.50 hryvnias, and on the cash market an additional increase of 50-60 kopecks is expected.
Anton Kurinny, a dealer in the global markets department of OTP Bank, believes that at the beginning of January, a currency deficit is traditionally observed in Ukraine due to the decrease in foreign currency earnings of exporters and the pressure of budget payments in December. This situation may cause an increase in the demand for currency, which, in turn, will force the National Bank to actively intervene in the market.
"We expect stronger demand for foreign currency or lower inflow of export foreign currency earnings at the beginning of the year. This will force the National Bank to actively participate in auctions," said Kurinny.
The regulator plans to continue to support the flexible exchange rate strategy and gradually weaken the hryvnia. The expert notes that the National Bank will conduct active and passive operations, and its behavior may be somewhat unpredictable for market players.
"We expect trading in the corridor of UAH 37.70-38.50/dollar," the banker predicts.
It should also be noted that it has already been warned about the negative impact of delaying international aid to Ukraine on the foreign exchange market. Kurinny believes that the regulator considers various scenarios and has a certain strategy of influencing the market depending on the news.
"That is, we will observe either increased intervention activity during positive news, or a certain weakening of the hryvnia during the period of negative expectations and the delay of negotiations related to the provision of financing to Ukraine," he said.
Regarding the impact on inflation and the dollar exchange rate, the National Bank of Ukraine identified stability in the foreign exchange market as one of the key factors in slowing down inflation. According to Kurinny, the current level of inflation allows the exchange rate to move freely, and the regulator to consider further strategies to curb inflation.
"The NBU has been following the inflation targeting strategy for a long time. Based on the analysis of all data, the regulator draws conclusions regarding the course strategy," the expert noted.
In December, banks were able to sell currency to the population at a better rate, which led to a reduction in the difference between the rates on the interbank and cash markets. According to Kurinny, the difference between these rates varied to the level of 50-60 kopecks per dollar.
"The difference between the cash and non-cash market is unlikely to exceed the level of 50-60 kopecks. Although, of course, sometimes you can find a spread in small banks when the hryvnia strengthens on the non-cash market, but this is more of a temporary "promotion" that you can try to catch in time," the banker noted.
An increase in the dollar rate was noted at the beginning of December, which is associated with seasonality and the increase in the need for currency for the purchase of imported goods. The head of the National Bank of Ukraine, Andrii Pyshnyi, explained this growth by factors of seasonality and increased demand for foreign currency for imports.
In general, at the beginning of 2024, the foreign exchange market of Ukraine is predicted to be dynamic, and market players should follow the news and decisions of the regulator for successful trading strategies.
