The sale of government bonds and increased exports will help strengthen the hryvnia on the interbank market

After a week of strengthening, the hryvnia exchange rate on the interbank market yesterday sank from 26.94/26.96 UAH/. to 27.06/27.08 UAH/. under pressure from speculators. However, analysts believe that in the near future the exchange rate will stabilize at the level of 27 UAH/., as fundamental factors contribute to the strengthening of the hryvnia.

Exporters and the National Bank are satisfied with this rate, and the need to pay taxes and supplies at the end of the year will force exporters to step up sales of foreign currency.

According to Deputy Economy Minister Taras Kachka, in 2021, for the first time since the beginning of hostilities in the Donbas, Ukraine will increase its exports to the level of peaceful 2013, when the export of domestic goods amounted to 6 63.3 billion. Already in 2014, against the background of military and economic aggression of the Russian Federation, the volume of exports decreased by 13.5%, in 2015 – by 29.3%, in 2016 – by 4.6%. During 2020, Ukraine increased its export volumes to 4 49.2 billion, which was 77.7% of the level of 2013. for 9 months of 2021, the volume of exports is 38.2% higher than the corresponding indicator of 2020, and in general for the year it may exceed.64 billion due to a record crop harvest and high world prices for raw materials.

Ukraine's largest trading partners were China, Poland and Germany, while Russia dropped from second to fourth place.

Another factor supporting the hryvnia exchange rate is the sale of government bonds. At the auction for the placement of government bonds on December 14, the Ministry of Finance raised UAH 10.77 billion to the budget, including UAH 5.8 billion in Hryvnia for a period of 3 months to 5 years at a rate of 10.5-13% per annum, дол 68.9 million in dollars for 2 years at 3.9% per annum, and € 102.5 million in euros for 1 year at 2.5%. Compared to the previous auction, where government bonds worth UAH 16.6 billion were sold, interest rates increased slightly, which indicates the readiness of the Ministry of Finance to actively borrow funds through government bonds, raising rates.

The government expects foreign investment, including reinvestments, to grow to a 5-year high of.6.5 billion in 2021.