In Ukraine the dollar in the near future to fall below the psychological mark of 27 UAH/$. The situation on the currency market stabiliziruemost, although devaluation risks remain.

About what will happen to the dollar in early may to read the material OBOZREVATEL.

The dollar will fall below 27 UAH/$

Analysts are still pessimistic: the dollar will go up, but not in the first week of may. Now the situation remains stable: no large sales or purchases should not be expected. The high demand is over and the dollar is floating around the usual level 27 UAH/$.

On the eve of holidays and long weekends the population continues to sell the remaining savings in foreign currency, it may slightly support the cash market.

“The foreign exchange market reacts sluggishly to the situation by keeping an atypical movement in the conditions of low liquidity. Part of the population, to replenish the hryvnia, sell before the holidays the currency. Great after waiting for 11 may, and the persistent devaluation expectations”, – says head of Department of Analytics Forex Club Andrey Shevchishin.

The dollar exchange rate in Ukraine

Such dynamics is observed amid reports of Ministry of health of Ukraine that the country managed to avoid the rapid spread of the coronavirus. In addition, since may 11, possible easing of quarantine measures.

Senior analyst “Alpari” Vadim Iosub adds: “the Second half of March, the dollar steadily kept slightly above the level of UAH 27. The last two days it was fixed below this level, returning to the values which have not been since March 17. Special attention is given to the reduction of the spread between the buying and selling to “normal” values, which was not on the market since the beginning of March. At the height of the currency panic, in the end of March he had expanded to 5%. Low spreads indicate a balanced supply and demand in the market of cash currency, complete lack of it “hysterical” emotional component”.

“The last two days it was fixed below this level, returning to the values which have not been since March 17. Special attention is given to the reduction of the spread between the buying and selling to “normal” values, which has not been on the market since the beginning of March,” says Iosub.

In the “Alpari” expect for the coming week moderate depreciation of the dollar against the hryvnia. The dollar on the interbank market can be traded in a week 26,8 UAH/$, and the cash dollar in banks is 26.8/27,0 UAH/$.

What will happen to the dollar until the end of the year

Despite the fact that at the moment the dollar remains in a stable range, and still has a chance to decline, in 2020 we expect a significant devaluation. In any case, as stated in the revised Cabinet forecast, which was laid in the updated budget. So, according to government estimates, in an average year the value of the currency will account for 29.5 UAH/$.

The revised macroeconomic forecast:

  • GDP (forecast for 2020) would be reduced by 3.9%;

  • prices will rise by 8.7% (previously planned 5.6 percent);

  • the hryvnia exchange rate will amount to 29,5 UAH/$ (instead of 27 UAH/$);

  • the average salary per month – 11 thousand UAH (taking into account inflation will not change compared to the year 2019);

  • the unemployment rate of 9.4% (1.3% percentage point more than in 2019);

  • budget revenues will be reduced by 120 billion UAH.

By the way, in the macroeconomic forecast of the IMF for Ukraine was given the worst rating. We will suffer more than most neighbouring countries, the report said Fund. The budget of Ukraine rewritten taking into account that the fall will be 3.9%. The real recession, confidence in the IMF, will be 7.7%. For comparison, Belarus will fall by 6%, Russia – 5.5%, Poland 4.6%, Croatia 9%, Portugal by 8%.

If this forecast will be correct, this crisis we will survive easier than the previous one. In 2015 we dropped by 9.8%, in 2009 – by 15.1%, in 1994- by 22.8%.

But there is good news. The IMF expects that in 2021, the Ukrainian economy will grow by 3.6%. That is, the crisis scale, but short. For the first time the problems in the economy did not arise due to structural economic problems, the collapse of the markets and the accumulated imbalances, and the spread of the virus, and quarantine.

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