Next year, the official exchange rate of the hryvnia will decrease to UAH 43/$ — the forecast

Next year, the official exchange rate of the hryvnia will decrease to UAH 43/$ — the forecast


In the coming years, the official exchange rate of the hryvnia will decrease, at the end of next year it will amount to UAH 43/$ — such a forecast was voiced by Artem Shcherbina, director of investments and head of the R&D department at Capital Times, at the investment conference “Invest Talk Summit”.

0 How will the rate change

According to the Capital Times forecast, the average official exchange rate of the hryvnia at the end of 2024 will be 41.8 UAH/$, and by the end of the year it will decrease to 43 UAH/$. In 2025, the hryvnia will continue to weaken, according to the forecast, its average rate will be 43.6 UAH/$, and will end the hour at the level of 44 UAH/$.

What factors will affect the course

Regulation change

Artem Shcherbina named three main factors that will have the greatest influence on the hryvnia exchange rate. The main thing is the regulation of the market by the National Bank. According to the expert’s forecasts, by the end of the year the NBU will:

  • will allow legal entities to service their debt obligations in foreign currency;
  • will introduce the sale of non-cash currency at the market rate;
  • will reduce the discount rate to the range of 20-23% per annum.

“While we are under pressure, the lifting of restrictions will affect the currency market. We have had restrictions for a very long time, and we do not know how he will react when they are removed, what the demand for currency will be,” says Shcherbyna.

The expert also notes that there is an example of a large number of non-reserve currencies, such as the Polish zloty or the Mexican peso, which show chronic weakness against key currencies even in the absence of war or strong economic shocks. This also indicates the possibility of weakening the hryvnia.

Economic situation

Key forecasts assume economic growth in Ukraine in the following years. At the same time, Shcherbina draws attention to a significant change in the current structure of the Ukrainian economy. The share of public administration in GDP grew from 7% in 2021 to 24% last year and, according to the forecast, will be 29% this year. The growth of this indicator was influenced by a significant increase in military expenditures.

“If we remove everything related to the defense sector from the GDP statistics, it turns out that Ukraine’s economy fell by 50% last year. Ukraine’s economy is in a state of shock. Defense currently accounts for 51% of budget expenditures,” the expert notes.

Since the budget of Ukraine is calculated in hryvnia, and foreign aid, which largely depends on its filling, is received in foreign currency, the weakening of the hryvnia is beneficial to the government.

Restoration of Ukraine

The factor that will support the relative stability of the exchange rate in the long term will be the return of Ukrainians from abroad and the growth of foreign investments. That is why, Shcherbyna explains, he does not expect the exchange rate to fall to 50 or 70 UAH/$.

About Invest Talk Summit

On May 27, the investment conference “Invest Talk Summit” started, organized by the “Ministry of Finance” website with the support of the “Ministry of Finance” Academy and Finance.ua.

The conference is attended by investors, owners of leading Ukrainian companies, managers and experts in the field of finance. They will discuss the current situation in the economy and forecasts of its further development, as well as give their recommendations on investments in the real estate market, cryptocurrency, balancing the investment portfolio, etc.

Source: Ministry of Finance

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