The dollar exchange rate on the interbank market remains stable despite attempts to shake it

2021-09-27 12:02:05
Machine translation
The dollar exchange rate on the interbank market remains stable despite attempts to shake it

The dollar exchange rate against the Ukrainian Hryvnia on the interbank market remains stable at the level of 26.6-26.7 UAH/., although at the end of last week, increased demand from buyers led to a slight increase in the exchange rate from 26.61/26.63 UAH/. to 26.71/26.73 UAH/.. In just a week, the dollar rose by UAH 0.04.

 

It is worth noting that the Ukrainian foreign exchange market is sensitive to even minor changes in supply and demand. At Friday morning trading, supply exceeded demand, so the exchange rate fell to 26.57/26.59 UAH/.. After that, the National Bank entered the auction and purchased 5 5 million at the rate of UAH 26.63/., which not only restrained the strengthening of the hryvnia, but also gave a signal to buyers that the dollar exchange rate would not fall further. Increased demand from buyers led to an increase in quotations to 26.72/26.74 UAH/., but at the end of the session, sellers increased the number of offers, as a result of which the exchange rate returned to 26.715/26.735 UAH/..

 

The main reason for the demand for foreign currency is the exit of non-residents from Hryvnia government bonds. According to the Ministry of Finance, from July 16 to September 21, the portfolio of government bonds owned by non-residents decreased by UAH 13.6 billion, or 12%, from UAH 107.4 billion to UAH 93.8 billion.

 

It would seem that the yield rates of Ukrainian securities reach a significant level of 12.6% per annum, which significantly exceeds 2-3% per annum on debt securities in Western countries. However, the yield on domestic government bonds is estimated relative to the current inflation rate in the country, which is 10.2%, which is significantly worse than the target level of 5% +/- 1%, which the National Bank promised to adhere to. Therefore, the yield does not correspond to the formula by which foreigners calculate the profit in each country.

 

Foreign exchange earnings from the sale of agricultural products remain quite significant and for at least another two months the dollar exchange rate will be under pressure to exceed supply over demand.

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