Globus Bank CEO Serhiy Mamedov assessed the current situation in the foreign exchange market
The National Bank of Ukraine is keeping exchange rate fluctuations within limits safe for the financial system, despite devaluation pressure caused by high imports. By the end of the year, the official dollar exchange rate may remain within the 45–46 hryvnia range. Demand for foreign currency is driven by the priority needs of the military, the state, and the energy sector. This was reported by RBC-Ukraine (Анастасія Мацепа) citing Serhiy Mamedov, according to the portal PromPolitInform.
The current devaluation of the hryvnia is predictable and corresponds to general economic indicators, in particular an annual inflation rate of 12.5%. An exchange rate corridor around 45.5 hryvnia per dollar does not create critical difficulties for businesses or the population. The main factor affecting citizens’ purchasing power remains the rise in consumer prices rather than fluctuations in exchange rate quotations.
Currency reserves and market flexibility
The regulator possesses a sufficient volume of international reserves to maintain monetary stability thanks to systemic financial support from foreign partners. The policy of managed flexibility allows the rate to move in both directions, which prevents panic among businesses and the population. At the same time, the regulator avoids sharp and uncontrolled spikes in currency prices.
The main buyer of foreign currency on the interbank market is the state, which needs resources to meet the needs of the Armed Forces of Ukraine, purchases of energy resources, fuel, and critical imports. The Ministry of Finance and the government require hryvnia liquidity to cover expenditures, which forces the regulator and banks to constantly coordinate currency flows.
Investment instruments and savings diversification
Internal government bonds (OVDP) remain an attractive way to preserve capital with a yield of about 16%, as the profits received are not subject to taxation. Investments in hryvnia-denominated securities show higher efficiency than dollar-denominated instruments with a rate of about 3%, since the US currency is also subject to inflationary depreciation.
An optimal savings distribution model involves holding about half of the funds in the national currency, distributing them between OVDP and term deposits. Buying euros is advisable primarily for covering expenses during trips to European Union countries, whereas for passive income, it is better to choose hryvnia and dollar assets.
Euro dynamics and integration into the EU payment system
The euro exchange rate in Ukraine is calculated automatically based on the euro-to-dollar ratio in international financial markets and is not regulated by direct NBU interventions. Expected decisions by the US Federal Reserve and the ECB in December could temporarily strengthen the dollar, and the base scenario for the euro’s value in Ukraine until the end of the year suggests a range of 50.5–51 hryvnia.
Ukraine’s future accession to the Single Euro Payments Area (SEPA) will allow for a significant reduction in fees for cross-border bank transfers and increase the speed of settlements. The integration process involves the implementation of stricter European financial monitoring standards and deepening cooperation with the EU banking sector.
Illustrative photo: Julia berezovska / CC BY-SA 4.0
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