What will happen to the hryvnia? Ukrainian hryvnia: expert forecasts

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Due to the unstable economic situation in the country, the question of what will happen to the hryvnia in 2015 has not lost its relevance for a long time. An interesting fact is that against the backdrop of important world events, such as the shale revolution, the fall in oil prices and the imposition of sanctions against Russia, no one can give a reliable forecast.

What was everyone talking about in 2014?

The end of 2014 turned out to be difficult for residents of many countries of the world, and Ukraine was no exception. The instability of the situation pushed experts away from predicting further developments. Only Andrei Novak, head of the Committee of Economists, and a few other public figures dared to make an official statement.

Novak focused on the fact that loans already in 2015 will not affect the change in the hryvnia exchange rate. According to him, stabilization of the situation will be possible only if any kind of speculation in the foreign exchange market is stopped, as well as with the parallel implementation of the strict policy of the National Bank.

According to Vladimir Starints, the country's leading economist, today Ukraine is in a pre-defaultcondition. The situation could become critical if Russia demands the return of the three billion loan. The situation can only be alleviated by austerity and a suspension of all social benefits.

A more optimistic forecast came from Eric Nyman, Managing Director of Capital Times. He said that the hryvnia exchange rate in 2015 would change in the range from 15 hryvnia to 25 per dollar, which, in fact, is happening today. If we manage to implement all the planned reforms and attract investors, the situation will even out by the end of the year.

National Bank of Ukraine deviated from the forecast

On the question of what will happen to the hryvnia, even the NBU did not dare to give an answer for a long time, since it did not submit its analysis to the Cabinet of Ministers on time. The Cabinet of Ministers had to use the forecasts of investment bankers and economists, which was officially announced by the Minister of Finance of the country Natalia Yaresko. With a stable state of the economy, the National Bank of the country annually provides a hryvnia forecast for calculating the project according to the budget for the next year. Prime Minister Arseniy Yatsenyuk, unexpectedly for everyone, officially announced that the draft state budget of the country for 2015 actually contains an estimated rate, which in fact is far from the real picture. According to him, the hryvnia to the dollar had to correspond to the ratio of 1:17.

Why do experts talk about further depreciation of the hryvnia?

Many economists confidently say that in the near future the hryvnia will continue itsthe fall. The trend is directly associated with military operations in the east of the country. And here the point is not even that funds from the budget go to support compatriots who came out to defend the country. The reason for the phenomenon lies in the fact that the events of the past year have caused the closure of a number of enterprises in the east. According to preliminary estimates, about 15-25% of the companies that previously formed the export power of the state are concentrated in this part of the country. Their closure led to a reduction in the inflow of foreign currency into the state.

It is also worth mentioning that it is in the east that the largest agglomerations of the country are located, which previously acted as active consumers. Despite the stabilizing balance of payments, the volume of imports fell along with the purchasing power of the population. The trend is such that until the situation in the east changes, the exchange rate of the Ukrainian hryvnia, whose dynamics has recently indicated a temporary correction, will continue to fall in the near future. Do not forget that this is just one of the possible scenarios.

Depreciation of the hryvnia due to events in the financial market

A forecast of analysts considering the question of what will happen to the hryvnia this year is widespread, which speaks of its further fall and even devaluation due to cardinal changes in the Ukrainian financial market. As prerequisites for the depreciation, they consider the massive withdrawal of investments from the state, which were 90% related to people who were previously in power. outflowfunds caused pressure on the exchange rate.

The outflow of capital from banks and conversion into dollars

The Ukrainian hryvnia, the price of which has fallen significantly over the past six months, will continue to decline due to lack of confidence in the financial sector. Over the past year, more than 30 banks in the country have been temporarily administered. According to preliminary forecasts, a similar fate threatens at least 30 more financial institutions. People, receiving from the deposit insurance fund in the range of 200 thousand hryvnias, immediately exchange them for currency, which only creates demand and makes the dollar grow in price. Based on the panic prevailing in society, and starting from people's attempts to save their capital, analysts say that the Ukrainian hryvnia will only weaken.

Bold forecasts of analysts and economists

Trying to find an answer to the question of what will happen to the hryvnia in 2015, experts set the bar at the level of 40-50 hryvnia per dollar. Such a frightening future for many stems from the impossibility of using international tranches to boost the economy or replenish the gold and foreign exchange reserves, since the assistance of foreign partners hardly covers Ukraine's external debts.

The fact that the National Bank has been systematically refinancing, the amount of which has already reached 1 billion hryvnia, also forces us to consider negative scenarios for the development of events. This is an actual increase in the money supply in the country, an increase in supply in the market and, accordingly, a fall in the value of the monetary unit. You can talk about panic, ohan almost complete sale of the gold and foreign exchange reserves and a military conflict, which do not allow specialists to make optimistic forecasts.

What are the experts talking about in the news?

The media often repeat information that the worst-case scenario would be one in which the hryvnia to the dollar will correspond to a ratio of 1:25. Given the fact that such a rate has already taken place on the black currency market, we can talk about working out the scenario. Many experts recommend not to rush and focus on the high probability of a trend recurrence. The situation is viewed in a negative light when the International Monetary Fund refuses to issue loans. At the moment, it is external sources of funds that are the only way for the country to cover the needs of the state for the next year. According to preliminary estimates, the country needs from 25 to 26 billion dollars of material support. Only 11-12 billion is able to allocate the IMF. Based on this fact, economists do not speak with confidence about how much the Ukrainian hryvnia will cost in the near future, since its fate largely depends on the decisions of the international financial institution.

What mood are the forecasts shaping?

Forecast hryvnia is directly related to the situation, which is likely to unfold in the country. Based on the negative shades of the most likely scenarios for the development of events, we can talk about the upcoming acceleration of inflation by about 5%. Unemployment growth may reachat 10 o'clock%. The labor market is going through tough times. There is a high probability of raising the retirement age. At the same time, the minimum income will remain the same. If the IMF gives a loan, the government will be forced to raise tariffs for housing and communal services. In particular, payment for electricity, hot and cold water will cost four times more. Rising food prices will become a natural phenomenon. Despite the fact that forecasts remain forecasts and the situation in the country can change dramatically after the intervention of we althy partners at any time, people do not stop panicking and worrying.

How to implement a forecast with a rate of 12 hryvnia per dollar?

In one of his speeches, Ustenko officially announced that the hryvnia, whose chart has recently been directed to the north and even touched the mark of 25 units per 1 US dollar, has every chance to roll back to 12 hryvnia per dollar. To achieve this goal, it will be necessary to implement a whole range of upgrades that will affect almost all spheres of life. The forecast will turn out to be realistic if state allowances to the official salary of civil servants are cut and subsidies are reduced, the impact on domestic business is weakened, which will lead to the return of capital to the country. The predicted situation will become more realistic if spending is cut as much as possible and austerity is introduced.

Temporary lull or real hryvnia strengthening?

If at the end of 2014 and at the beginning of 2015 most of the forecasts thataffected the ratio of the hryvnia to other currencies of the world, had a negative connotation, today the mood in society has changed significantly. A fairly large percentage of forecasters stopped predicting the growth of the dollar, counting on the narrowing of the exchange rate corridor to a range of 21.5 to 23.5 hryvnia per dollar. This trend, in which the Ukrainian hryvnia will continue to rise in price, is supported by the fact that by the end of the first quarter, many enterprises were forced to pay tax, which caused a reduction in the money supply in the market. Moreover, the NBU itself artificially reduces the amount of funds in the markets, stimulating banks to sell foreign currency. It is too early to talk about stability, but positive assessments of the situation are very encouraging.

What could happen by the end of the year?

By the end of 2015, the situation with the hryvnia in the foreign exchange market may acquire three development formats. With a balanced outflow of capital and provided that the IMF does not stop its investment, by the end of the year the national currency will be at the level of 27 to 29 hryvnia per dollar. If the outflow of capital from the country maintains the level of the end of 2014, we can safely prepare for an indicator of 32-35 hryvnia per one US dollar. With an increase in the outflow of capital from the country several times, the situation may become very frightening, one of the most stringent forecasts at the level of 50 hryvnias per dollar may become quite real. A depreciation of 1-1.5 times is associated with the desire of the population to convert their savings into dollars and hide them under the pillow. Ratio "hryvnia to ruble"today it is not so relevant, because Russia, like Ukraine, is going through difficult times today.

Summing up, or Do future forecasts make sense?

Based on all of the above, it can be noted that the analysis of the situation in the country did not provide analysts and economists with the opportunity to lean towards a single forecast. The opinions of both politicians and specialists differ radically. The answer to the question about how the hryvnia will relate to the ruble, to the dollar, to the euro, no one can give with a greater degree of probability. This is due to the instability of the economic situation and the inability to predict the actions and decisions of the IMF, which directly affect the exchange rate of the national currency.

Very interesting is the fact that at the time when analysts were talking about the fall and devaluation of the hryvnia by spring, it began to grow stronger. Today there is talk about strengthening the national currency, but no one dares to insist on it. The hryvnia, whose chart has been directed north since the beginning of the year and only recently rolled back and froze, can become more active and move in one direction at any time. This can be facilitated by both external causes, important world events, and economic phenomena within the country. The complex and ambiguous situation in the global economy is making its own adjustments to the hryvnia exchange rate.