Dollar on the Interbank Market Rises by 2.6% Over the Month to a Record 40.65-40.7 UAH/USD

Despite active currency sales on the interbank market and a slight increase in exports in May, the interbank dollar rate continues to rise, having increased by 2.6% over the last month to a record 40.65-40.7 UAH per dollar.

As of June 17, the NBU set the official dollar exchange rate at 40.649 UAH/USD, and the euro at 43.4782 UAH/EUR.

From June 10 to 14, the National Bank of Ukraine sold $898 million on the interbank market, which is $203.3 million more than the previous week, while purchasing $180,000.

In total, since the beginning of the year, the National Bank has sold $12.893 billion, while purchasing $115.8 million. Over the month from May 17, the NBU sold $3.37 billion to support the hryvnia exchange rate, although on average it sold about $2.3 billion per month. The growth of the trade deficit has become the main factor in the exchange rate increase.

According to the State Customs Service, Ukraine's total trade turnover for January-May amounted to $44.3 billion, with imports accounting for $27.5 billion and exports totaling $16.8 billion. The coverage of imports by exports is only 61%.

The largest importers of goods to Ukraine during this period were China ($5.3 billion), Poland ($2.9 billion), and Germany ($2.2 billion). The largest export destinations from Ukraine were Poland ($1.7 billion), China ($1.4 billion), and Spain ($1.4 billion).

The top three most exported goods from Ukraine in January-May were food products ($10.8 billion), metals and metal products ($1.8 billion), and mineral products ($1.6 billion).

Deputy Minister of Economy and Trade Representative of Ukraine Taras Kachka reported that in May 2024, imports of goods decreased by 7% compared to April and amounted to $5.1 billion, while exports from Ukraine totaled $3.34 billion, which is only 0.5% less than in April. The active export of agricultural products in May, amid rising world prices and a decrease in exports due to the rising dollar exchange rate, contributes to a slight improvement in Ukraine's trade balance. As reported, Ukraine set a record for sugar exports in May, exporting 108,000 tons, with 65% going to the EU and 35% to other countries.

The NBU maintains a positive forecast for Ukraine's economy, and the Board of the National Bank decided to lower the discount rate from 13.5% to 13% from June 14, 2024," said NBU Governor Andriy Pyshny.

Given the still moderate inflation indicators, the ongoing improvement in inflation expectations, and the balance of risks for further inflation dynamics, the National Bank continues its cycle of monetary policy easing to support economic recovery.

After a prolonged period of decline, inflation remained unchanged in April and only slightly increased in May – to 3.3% year-on-year.