Economy

Hryvnia has fallen to a new historic low: expert names key conditions for currency stability

FORECAST

Fluctuations in the hryvnia exchange rate are once again in the spotlight after the National Bank set the official rate at 42.3713 UAH to the dollar on November 25. Despite the fact that the value is close to the January low, economists reassure that nothing critical is happening to the national currency. Economist Oleh Pendzin is among those who call for not dramatizing the situation. In the commentary [Kommersant] he reminded that the state budget for 2025 provides for an average annual exchange rate of 45 UAH/$. Therefore, today’s “42 with a tail” is not a fall, but rather working fluctuations against the backdrop of a complex macro-financial reality.

“Nothing is happening to the hryvnia. Do you know what the average annual exchange rate was in the budget for 25 years? 45 hryvnia. Today, we have what on the street? 42 with a tail. So, in principle, we have not even reached the level that was budgeted.

The hryvnia exchange rate is directly related to macroeconomic financing. If there is enough of it, the hryvnia will be more or less stable. If it is not enough, the National Bank will undoubtedly weaken the hryvnia,” Pendzin said.

According to the expert, external resources will be the main factor in the further dynamics: the reparations loan, the new IMF program and the total amount of support for Ukraine.

“So everything depends on whether there will be a reparations loan or a new program with the International Monetary Fund. That is, there are many things that do not depend on us, but will directly affect the hryvnia/dollar exchange rate,” Oleg Pendzin emphasized.

As for the forecasts for December, Pendzin is cautious: it will be possible to speak confidently only after the decisions of key donors.

“Well, the budget is 45.6. But, again, I will tell you the forecast only when I know whether there will be a reparations loan. Then we can predict something,” the expert concluded.

As a reminder, earlier [Kommersant] reported earlier that Ukraine’s currency market would remain under control for the next two years, and that the dollar would not exceed UAH 48 under the baseline scenario.

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