The dollar has “become”, what to expect with the end of the long weekend

The dollar exchange rate remained stable over the past week. The main reason for the stability, according to financial analysts, was the feast of the Intercession of the Virgin, which shortened the working week from five days to three. But, recall, with the subsequent working off for Friday, October 15, on Saturday, October 23.

Experts expect that it is the extended working six-day period that promises us news on the financial market. But in which direction the trend will go – the opinions of experts differ. There is only one unanimity: exchange rate fluctuations can be noticeable.

What happens in the foreign exchange market, and where will the dollar rate go next in October, found out “Today”.

Our experts are Oleg Pendzin, a member of the Economic Discussion Club, Oleksandr Okhrimenko, President of the Ukrainian Analytical Center, Andriy Shevchishin, Head of the Forex club analytics department, and Maksim Oryshchak, an analyst at the Center for Exchange Technologies.

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What happened to the course in a week

After a significant decline in early October (-21 kopecks), the dollar exchange rate stabilized on the 9th at UAH 26.45 / USD in cash sale and at UAH 26.26 in purchase and “froze” for the whole week. Fluctuations were within the statistical error – up and down by a penny. The spread (the difference between the buy and sell rates) did not change: 19-20 kopecks. The last time a dollar was so cheap was in June 2020.

The maximum rate at which it was possible to return a cash dollar is UAH 26.33 (as it was a week ago), the minimum rate at which one can buy a cash dollar is UAH 26.36 (a penny more than a week ago). Note that such a high purchase rate is observed in exchange offices that buy foreign currency. The declared low selling rate, as a rule, is virtual, at such a price there are no dollars available. The real selling rate starts at UAH 26.45 / USD, while the buying rate is no higher than 26.25.

After the weekend, the National Bank also kept the rate stable all week – UAH 26.35-26.36 / dollar. On Monday, October 18, the regulator set the rate of UAH 26.34 / dollar.

Analysis of the market situation

Experts say that before the holidays, activity in the interbank foreign exchange market was low, supply and demand were in equilibrium, which was reflected in the cash exchange rate.

But the balance, according to Oleksandr Okhrimenko, was maintained by the National Bank: buyers were inactive, exporters continued to offer currency, the regulator bought it out, restraining the excessive and rapid strengthening of the hryvnia.

Andriy Shevchishin noted that non-residents now completely ignore Ukrainian securities. The Ministry of Finance set an anti-record yesterday: at the last auction on October 12, it attracted the minimum amount of funds since the beginning of 2021 when placing government bonds – just over UAH 0.5 billion.

“Since the beginning of October, non-residents have reduced the portfolio of government bonds by UAH 1.88 billion (almost 2%),” the expert analyzes. “There are other factors that do not work in favor of the hryvnia. , coal, fuel oil, oil) continue to grow, reinforcing fears of a difficult winter period. Investors worsen economic growth forecasts. But against this background, the hryvnia looks unreasonably strong, which reflects more the situational balance of the market than economic prospects. “

Oleg Pendzin is sure that the strong hryvnia is artificially supported by the National Bank, and this does not benefit the Ukrainian economy. Only holders of Ukrainian securities win, including foreign investors who withdraw dividends abroad: they can buy more dollars if the dollar becomes cheaper.

“The National Bank has all the tools to regulate the hryvnia exchange rate, but for some reason this does not happen, on the contrary, a policy is being pursued that is poorly predictable, taking into account the interests of the Ukrainian economy.

What to expect next week

The opinions of the experts differ markedly.

The most soothing prognosis is from Alexander Okhrimenko. In his opinion, the stability of the exchange rate will remain at the current level for another week.

Andrei Shevchishin, on the other hand, expects that next week’s trading on the interbank market will be highly volatile (exchange rate variability), which will affect the cash market.

“The supply and demand accumulated over the holidays will spill out into the markets, which will increase their trade turnover and volatility,” the expert predicts. “All current factors will remain effective. in general, we maintain devaluation sentiments in the medium term and consider the hryvnia overvalued. During the week, the range of the cash rate is 26.25-26.5 hryvnia / dollar. “

Maxim Oryshchak recalled that hryvnia strengthened in Octoberand this trend will continue.

“The average selling rate of the cash dollar during the week will fluctuate within the limits of UAH 26.15-26.3 / dollar (another minus 15 kopecks and more), and the average euro selling rate will tend to UAH 30,” Maksim Oryshchak specified. for the growth of the hryvnia, both the usual monetary and verbal. Over the year, the NBU has repeatedly raised the discount rate, strengthening the hryvnia. There was news that Ukraine may receive an IMF tranche of about $ 1.4 billion in October-December. External financial support, by tradition, it will be perceived positively by the market and does not promise currency fluctuations. “

Oleg Pendzin said that the National Bank is considering raising the discount rate from 8% to 8.5-9%.

“If it is raised during the week, it will further strengthen the hryvnia,” he explained.

Sell ​​or buy currency

Oleksandr Okhrimenko confirmed his forecast: the hryvnia and in the medium term (a month or more), at least, will not fall in price, therefore, hryvnia deposits will remain more profitable than currency stash for another month.

Oleg Pendzin advises not to change the hryvnia for currency and vice versa until it becomes clear whether the hryvnia will devalue by the end of October or not.

Maxim Oryshchak says that due to the cheap dollar, a potential growth in demand for the currency is accumulating. This can, regardless of the interbank market, put pressure on the hryvnia exchange rate. That is, whoever buys cheap dollars will soon be the winner.

Finally, Andrey Shevchishin is sure: dollars should be bought while the rate is favorable.

Renowned financial analyst Eric Nyman gave a long-term forecast for the dollar. See the plot for more details.