Innovation - is a historically irrevocable change in the method of production of things.
J. Schumpeter


M.I. Tugan-Baranovsky

J.A. Schumpeter

N.D. Kondratiev

Gallery of prominent scientists

UA RU EN

Обращаем внимание на инновацию, созданную на данном сайте. Внизу главной страницы расположены графики,  которые в on line демонстрируют изменения цен на мировых рынках золота  и нефти, а также экономический календарь публикации в Интернете важных мировых экономических индексов 

 
Forecasts

Ukraine. Currency market and forecast average annual exchange rate for hryvnia


01.03.09

Currency market

Irena Bulevska

 tulip@ua.fm

The official exchange rate of hryvnia against US dollar remained unchanged for 2.5 months and made 7.7 hryvnias/USD in February 2009. The market exchange rate of hryvnia on the interrbank market was 8.1 hryvnias/USD at the end of February, having demonstrated its growth from 7.83 hryvnias/USD, which makes 0.27 hryvnias, compared to the data as of the end of January 2009. Euro grew by 25.3 kopeks (2.5%) and cost 9.84 hryvnias/EUR on February, 27, 2009; the Russian ruble grew by 0.06 kopecks (2.9%) and cost 2.15 hryvnias/10 RUR on February, 27. This generally demonstrates distrust towards national currency and retention of the demand for “safe investment” currency, which in its turn leads to the fall in the national currency exchange rate.

According to the data from the National Bank of Ukraine, the volume of transactions on the Ukrainian interbank currency market (purchase and sale in USD equivalent) was 12,981.7 million USD in February 2009, which is by 18% more than in January (10,997 million USD). Three currency actions were held with 145.8 million USD sold (decree of the National Bank of Ukraine No.12 dated January, 14, 2009).

Average weighted cash exchange rate for hryvnia in USD selling transactions of Ukrainian banks was 8.33 hryvnias/USD compared with 8.22 hryvnias/USD in January, demonstrating growth by 11 kopecks.

The volume of operations on the Ukrainian cash market (selling and purchasing of foreign currency for hryvnia in USD equivalent) was 2932.6 million USD (2,109.8 million USD in January), including:


- the volume of currency purchased from citizens by the banks – 754 million USD (767.5 million USD in January 2009);

- the volume of currency sold to citizens – 2,178.6 million USD (1,342.3 million USD in January 2009).

If compared with January indexes, one can trace gradual sizable satisfaction of the people’s need for dollar cash and decrease of dollar cash demand (by 61%).

Interventions of the National Bank of Ukraine (balance) showed deficit of 1,729.6 million USD compared with 1600 million USD (in dollar equivalent) in January, demonstrating insufficient level of dollar offer and dynamics falling by 129.6 million USD.

Total international reserves (according to current data) – 26,458.74 million USD compared with 28,800 million USD in January showed decrease by 2,341.26 million USD. Individual bank deposits in freely convertible currency (in dollar equivalent) decreased by 811.2 million USD and amounted to 12,233.4 million USD on February 27, 2009, due to instability of many banks resulting in distrust of their depositors.

In January 2009, the real effective exchanged rate of hryvnia increased by 4.8% against December 2008. This was because nominal effective exchanged rate of hryvnia (3%) strenthened and inflation in Ukraine exceeded its weighted index in the countries, which are main trade partners of Ukraine (by 1.8 percentage points). Strengthening of real effective exchange rate counteracted to export, worsened trade balance, decreased currency inflow, and resulted in reduction of National Bank reserves, as the deficit of trade balance is financed from its international reserves.

According to summarized data of European, CIS, and Asian national banks, 83% of countries showed devaluation of their national currencies against US dollar, which testifies to the crises and reflects the state of these countries’economy against the economy of their currency pair country. Official exchange rate remained unchanged in Ukraine due to administrative regulative measures. The National Bank considers hryvnia’s revaluation to be inappropriate because of the trade balance deficit, as it may stimulate additional shrinkage of exports and currency inflow. Substantial revaluation of hryvnia may stimulate individual dollar deposits outflow, which would have a negative influence on general economic situation, though low dollar rate would make paying off the corporative sector debts easier. Therefore, there is no single opinion about forced national currency strengthening.

One of the variants for national currency strengthening can be taking World Bank investment credits for the development of certain national economy sectors, namely: metallurgy industry, chemical industry, and machine building industry, and increase of domestic innovative goods production. First of all it will allow to increase domestic money demand and will make for hryvnia exchange rate raise, as volume does not depend on scale for innovative production (Cobb-Douglass function for innovative production a + b > 1 (growth function).

We forecast that average annual exchange rate for hryvnia will not exceed the range forecasted by the International Monetary Fund (8.6 hryvnias/USD). There will not be any substantial rise and fall fluctuations. Technical analysis shows that dollar has ended its volatile tendency in 2008 and having shown its maximum in December 2008 is now forming relatively horizontal trend, which is supposed to end about June 2009 (according to inside lag, which lasts 6 months in our country), demonstrating a minor decrease. There is a possibility of its strengthening if people get rid of their dollar savings due to dollar rate weakening, though this is a minor possibility.

Posted on the website: 2009-04-03

Comments on this article:

Add new comment!

* – The Fields are obligatory for filling!

Your name *:
Your e-mail address:
Your message *:
Enter the number *:
 
2008-10-09:
Прогноз ИЭЭ #6 (69). Мировая экономика получит импульс экономической активности в начале 2009
 среду 08.10.08 семь центробанков мира одновременно понизили учетные ставки на 0,5%
2007-02-06:
The forecast of the IEE #3 (59). Economic dynamics in Ukraine for 2007
In 2007 on the forecast for Ukraine following risks will be imposed
2007-01-18:
The forecast of the IEE #2 (58). Currency tendencies for 2007

Summing up 2006 it is already possible to speak, that for US dollar it was one of the best periods. We shall recollect even the end 2004 beginning of 2005 when its rate has sharply gone downwards in relation to practically all leading world currencies

2006-04-26:
The forecast of the IEE #8 (47).

In political relations between Yushchenko and Timoshenko eccentric events must happen to May 2006 (the Forecast on Hlebnikov Part 3)

2006-04-08:
Forecast IEE #7 (46). Europe: simultaneous growth of risks and sociopolitical pressure
The increase in the discount rate by the European central bank (ЕCB) in 2006 will cause a growth in the risks in the economies of incorporated Europe
2006-04-07:
The forecast of IEE #6 (45). Exchange risks of the world in 2006
afraid, that in the second half of 2006 the dollar exchange rate in the world exchange markets can fall to 30 % - 45 % in relation to ...
2005-05-10:
IEE Forecast [16]. Ukraine will not avoid crisis, if not to take precautions and not to start innovative processes
After year 2006, the economy of Ukraine will step in a phase of its first serious economic crisis
2005-04-27:
IEE Forecast (15). American economy will absorb the world capitals like a powerful pump in 2005
Even today we may predict the result of a FRS experiment on driving of the American economy from " a soft patch " at the beginning of 2000
2005-04-25:
IEE Forecast. If there are no innovative priorities, the habitation market will become a risky point of the fund for business and investors.

The real estate sector is a small drop, and but for economy it reflects the bitter history of Ukraine, and (without exaggeration) all the CIS history.

2005-04-05:
IEE Forecast (13). Investments outside of systemic innovations go "nowhere": on the lot of oil and dollar
World prices for oil and dollar exchange rate will be "the valve of constant pressure " for economic growth
2005-03-23:
IEE forecast and comment (II). If the discount rate will raise, dollar will strengthen
Though practically nobody doubts a possible FRS decision to raise a discount rate by 0,25 %, the world of analysts of the currency market has stopped waiting
2005-03-22:
IEE forecast and comments. On a sudden problem of " canceling of the obligatory sale of 50 % currency proceeds"
Political risks in management of economy do not weaken in Ukraine. That can provoke an economic crisis even in a short-term prospect (after 2006)
2005-03-18:
IEE Forecast. Dollar, oil, steel, and the global innovational system will influence the world dynamics
Factors, which will influence economic dynamics in the nearest future
2005-03-01:
IEE Forecast. Ukrainian economy is most likely to remain excessively dependant on tools of economic policy in 2005
Most likely, innovative processes, capable to bring Ukraine forward at any commodity or technological sphere will not start in
2005-02-25:
IEE Forecast. The World Economics Will Run a Fever For Some More Time
According to leading economist's opinion, continuous decrease of long-term rates in the world's most developed countries is one of the greatest puzzles in the financial world today. The problem is important for the USA, and other national economics
2005-02-23:
IEE Forecast. The World Economics Will Run a Fever For Some More Time
The world economics will run a fever for some period (5-10 years). It will suffer decreased production effectiveness, raised consumption of oil in China, price fluctuations for fuel. After that, we will experience an unprecedented and grand innovational project. The project will change the quality of all the world economics, absorb all the free capital, and increase long-term yield.
2005-02-15:
IEE Forecast: Growth of a dollar exchange rate can cause growth of the external economic risks for Ukraine
As to the internal factors, which compensate specified risks, it is necessary to carry significant potential of economic growth to them due to activization of internal consumption. It is a question of activization of the factors removing restrictions on ways of incomes growth of people, of fine and average business.
2005-02-07:
IEE Forecast. In economic there can be a slow economic growth with the crisis periods
The deficiency growth of the account of current operations in the USA is connected first of all with smooth and deep downturn of a discount rate.
2005-02-01:
IEE Forecast: on a dollar exchange rate, OPEC conference, and session of FRS board, Bush's speech and meeting of G7.
Events of this week will leave the trace in 2005 World discussions
2005-01-19:
IEE Forecast
The committee for Federal Reserve System (FRS) in the USA (FOMC) will raise a discount rate for 0,25 % having brought it up to the value of 2,50 % at the next session, which will take place on February 1-2, 2005.
2004-12-30:
IEE. In the coming year the price for gold will continue to grow
Gold already would seem ceased to carry out function of money, again in the price because of the monetary markets dynamics.