This week, the Ukrainian hryvnia is facing intensified negative dynamics due to a number of factors. The main threats to the stability of the exchange rate include the start of the heating season, increased shelling from Russia, heightened demand for currency from the population, and uncertainty caused by the U.S. government shutdown.
This forecast was made by financial analyst Oleksiy Kozyrev and published on the YouTube channel Finance.ua.
Internal pressure factors
The analyst notes that the currency market in Ukraine will be influenced by several opposing trends, most of which will act against the hryvnia.
Key internal risks include:
Increased shelling of infrastructure. Aggression limits business and forces significant expenditures on recovery, which heavily pressures the hryvnia.
Start of the heating season. Energy and utility companies face additional costs for purchasing energy resources and equipment, increasing demand for dollars and euros in the interbank market.
Rising demand from the population. The population is actively purchasing currency, leading to an increase in the negative balance between the amount of currency citizens sell and buy.
Shutdown in the USA: an external factor
An important external threat is the partial shutdown of the U.S. government, which has already begun. This uncertainty affects investor sentiment and, consequently, global financial markets.
'This uncertainty in the USA seriously affects investor sentiment, and impacts the behavior of the euro/dollar pair and gold prices,' the analyst notes.
The longer this process lasts, the stronger its impact on the U.S. stock market. The fluctuations of the euro exchange rate against the hryvnia are felt immediately by Ukrainians.
Exchange rate forecast and the role of the NBU
It is predicted that the pressure on the hryvnia will intensify due to the summation of negative factors. The National Bank of Ukraine must actively intervene in the interbank market to balance exchange rate fluctuations and support the hryvnia.
It is expected that the euro to hryvnia exchange rate will fluctuate between 20 and 40 kopecks. The projected exchange rate corridors for next week are as follows:
Cash dollar: in banks - from 40.70 to 41.85 UAH, in exchange offices - from 41.00 to 41.80 UAH.
Cash euro: in banks - from 48.00 to 49.15 UAH, in exchange offices - from 48.10 to 49.05 UAH.
The expert predicts a deterioration of the hryvnia exchange rate due to a number of internal and external factors, such as shelling, the start of the heating season, and the U.S. shutdown. The National Bank of Ukraine will try to balance the situation in the currency market to support the hryvnia under pressure.