Should You Stock Up on Dollars? What to Expect from the Exchange Rate Next Week
8 August 16:11
In mid-August, the main factor affecting the foreign exchange market may not be public demand for dollars or euros, but rather the situation on the fuel market. Due to volatility in global oil prices and security risks, Ukrainian importers may step up their currency purchases; however, the National Bank remains capable of keeping the situation under control.
Taras Lesovyi, director of the Department of Financial Markets and Investment Activities at Globus Bank, spoke to RBC-Ukraine about the risks that could affect the dollar and euro exchange rates next week and what Ukrainians should expect, according to "Komersant Ukrainian".
Why Fuel Could Affect Exchange Rates
According to Taras Lesovyi, Director of the Department of Financial Markets and Investment Activities at Globus Bank, the fuel sector could be the main source of tension for the currency market this time around.
The reason is the unstable situation in the Middle East, which is keeping global oil prices unpredictable. This creates additional uncertainty for Ukrainian importers of petroleum products.
Watch us on YouTube: important topics – without censorship
To avoid the risk of buying currency at the last minute, companies may begin purchasing it in advance.
“Importers will increase the volume of their foreign currency purchases and build up a certain reserve. This behavior gives them a time and financial buffer, but at the same time increases overall demand in the interbank market,” Lesovyi explained.
The NBU will continue to curb fluctuations
The banker predicts that demand for foreign currency will continue to exceed supply. At the same time, this does not mean a loss of control over the market.
According to him, the National Bank will continue to offset the foreign currency shortage through interventions.
“It is precisely the ‘managed flexibility’ regime that will remain the primary mechanism preventing a situational increase in demand from turning into an uncontrolled exchange rate ‘run.’ “Thanks to foreign exchange interventions, the NBU is able to smooth out sharp fluctuations and maintain the necessary balance,” the expert noted.
It is expected that next week the volume of foreign exchange interventions will remain within the usual range—around $800–900 million.
Why Higher Fuel Prices Matter Beyond Just the Exchange Rate
Lesovyi points out that risks in the fuel market can affect more than just the currency.
Rising prices for gasoline and diesel are gradually affecting the cost of transportation, goods production, and service provision, and could therefore accelerate inflation.
However, according to the expert, seasonal price restraint on food products is partially offsetting this risk for now, so there is no reason to expect sharp exchange rate fluctuations in the near future.
Should You Buy Up Foreign Currency?
The banker believes that in the fall, there is traditionally a surge in reports about a possible enemy offensive, a harsh winter, or a sharp drop in the hryvnia.
However, in over four years of war, none of these factors has led to a currency collapse.
“Some people may decide to buy dollars or euros ‘just in case,’ accepting a clearly inflated selling rate. However, there are currently no signs of strong panic-driven demand,” Lesovyi emphasized.
He added that thanks to the NBU’s policy, the cash exchange rate will remain close to the interbank rate, so the emergence of two distinct currency markets is not expected.
Another risk: exports
The banker cites the decline in exports due to Russian attacks on merchant ships as an additional challenge for the foreign exchange market.
Lower exports mean a smaller inflow of foreign currency earnings into Ukraine.
However, this factor is currently offset by international financial aid, so the expert does not see an immediate threat to exchange rate stability.
What will the exchange rate be next week?
According to Lesovoy’s forecast, the foreign exchange market will remain under control from August 10–16.
Expected exchange rate ranges:
- interbank: 44.5–45 UAH per dollar and 51–51.7 UAH per euro;
- cash market: 44.6–45 UAH per dollar and 51–51.7 UAH per euro.
According to the banker, the main risks for the hryvnia remain the same as they were at the end of July, but so far they have not been able to significantly destabilize the currency market.
“Information waves may roll in one after another, but the foreign exchange market will most likely remain within its current ‘bounds,’” Lesovyi concluded.
Read us on Telegram: important topics – without censorship
