Why is the hryvnia not falling against the dollar and euro?
After the start of the war in 2022, the exchange rate of the Ukrainian hryvnia rushed down; if before the start of hostilities, one US dollar was worth 28 hryvnia, then after a couple of months, 1 dollar began to cost 37 hryvnia.
It would seem that everything is logical; a war on the territory of a country never adds stability to the national currency.
But strange things began later; for a year and a half now, the hryvnia has not fallen below the level of 40 hryvnia per 1 US dollar. Why is there no further decline, despite the problems in the Ukrainian economy?
In fact, the answer to this question is quite simple: the hryvnia exchange rate remains at the current level thanks to the efforts of the national bank.
The first year there were restrictions on the purchase of foreign currency imposed by the NBU; it was practically impossible to buy dollars or euros through a bank.
Well, the third reason that has a favorable effect on the hryvnia exchange rate is the regular flow of foreign currency into the foreign exchange market of Ukraine. The National Bank consistently sells billions of dollars and euros on the interbank foreign exchange market.
According to the online publication Korrespondent , in just 3 months of 2024, the NBU sold 5.9 billion US dollars. That is, almost 2 billion US dollars are thrown onto the market every month.
It is this monetary policy that makes it possible to maintain the national currency exchange rate within 40 hryvnia per dollar for a long time.
What will the hryvnia exchange rate be in 2024?
Let's start with the fact that the state budget of Ukraine for 2024 sets the average dollar exchange rate at 40.7 hryvnia.
Since at the beginning of 2024 the dollar exchange rate was only 38, there is a high probability that by the end of the year it will rise to 42 hryvnia per 1 dollar.
In addition, there has been a tendency to reduce the NBU scientific rate; now it has already been reduced to 15% per annum.
Well, the main point influencing the foreign exchange market is the availability of dollars from the state for their sale on the interbank market. Now the need is 2-2.5 billion dollars per month.
So far, the situation with foreign exchange earnings is more or less stable, but no one guarantees that it will not change in the coming months. In addition, at any moment, rush demand may arise, which will push the dollar above 40 hryvnia.
As a result, we can say that in 2024 the hryvnia will fall and, with a high probability, its exchange rate to the US dollar will overcome not only the 40 mark, but also 45 hryvnia per US dollar.