Experts forecast hryvnia strengthening in Q1 2021

Experts forecast hryvnia strengthening in Q1 2021

In the first quarter of 2021, the hryvnia may strengthen to UAH 26.0-26.5 per the U.S. dollar due to the return of non-residents' investments in domestic government bonds, according to Vadym Iosub, a senior analyst at Alpari.

“Bank of America analysts suggest that the hryvnia may strengthen to UAH 26.0-26.5 in the first quarter of 2021 due to the return of non-residents’ [investments] in domestic government bonds. According to the investment bank's report, the main drivers for the inflow of non-residents' money are progress in the IMF program, as well as the general optimism in the markets. BofA analysts believe that non-residents can renew their domestic government bonds’ portfolio from the current $2.6 billion to the pre-crisis $5 billion,” the expert stressed.

He also said that according to the expectations of international experts, in the absence of new negative trends, such an inflow of capital could become a key support for the hryvnia in 2021.

However, this week there may be insignificant growth of the dollar against the hryvnia. The dollar on the interbank market may be traded at about UAH 28.4 in a week, and the cash dollar in banks may be traded at about UAH 28.3/28.5.

Over the past week, the dollar exchange rate against the hryvnia grew by 0.1-0.3% in various segments of the foreign exchange market, Vadym Iosub said.

Since last Monday, the U.S. dollar exchange rate set by the NBU has decreased from UAH 28.35 to UAH 28.27 (-0.3%).

According to UkrDealing, over the reporting period, demand/supply of the dollar on the interbank market rose from UAH 28.29/28.32 to UAH 28.33/28.36 (+0.1%). Average purchase sale rates of the cash dollars in banks increased from 28.15/28.40 to 28.19/28.50 (+0.2%/+0.3%) over the past week.


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