The dollar has been breaking through the ceiling all year: what should Ukrainians expect in autumn?
5 July 2024 18:36
ЕКСКЛЮЗИВ
Over the past year, the dollar has been rising rapidly. In some exchange offices, it was as high as UAH 40.97 per dollar. Now, the National Bank of Ukraine has allegedly strengthened the hryvnia with international assistance. As of 5 July, the official dollar exchange rate was set at UAH 40.54. On the black market, the dollar is being asked for UAH 40.80 to 40.88.
How long will the NBU manage to keep the exchange rate stable, what will happen to the hryvnia by the end of the summer, and is it worth keeping money in foreign currency? Specially for [Kommersant]oleg Pendzin, a member of the Economic Discussion Club, answered these questions.
“In June, the NBU reached the average annual exchange rate that was included in the state budget. And now it will be slowly changing to reach UAH 41 by the end of the year, UAH 41 per $1 with a little tail. However, the average annual exchange rate should reach UAH 40.7 per $1,” Oleg Pendzin said
The member of the Economic Discussion Club assured that there will be no significant increase in the dollar by the end of the summer. The exchange rate will average up to UAH 41 per dollar, no more. At the same time, the National Bank will periodically strengthen or weaken the hryvnia. Pendzin states that the NBU sold $615 million on the interbank foreign exchange market last week. “The national bank is essentially the only seller. This means that it sets the rules of the game. Moreover, it is the regulator.
What can affect the sudden collapse of the hryvnia
The economist is confident that there will be no sudden collapse of the hryvnia this year. All thanks to the same financial assistance from our allies.
“As of today, we have fully confirmed macro-financial assistance until the end of this year. Therefore, there can be no basis for a fall, because all macro-finance will come in time and in full,” Oleg Pendzin said
In its Budget Declaration for 2025-2027, the Cabinet of Ministers forecasts the dollar to rise to more than UAH 45, as well as a slowdown in economic growth next year. The average hryvnia to dollar exchange rate is expected to reach UAH 45 per dollar in 2025, UAH 46.5 in 2026, and UAH 46.4 in 2027.
Where is the best place to keep money today
The safest place to keep money today is in domestic government bonds, says Oleg Pendzin, a member of the Economic Discussion Club.
“In terms of interest, T-bills give the same figure as a deposit. But you will pay another 19.5% tax on the deposit. And the domestic government loan is already tax-free. There is no point in keeping money in foreign currency in the bank,” Oleg Pendzin
If you calculate how much a deposit of UAH 100,000 will yield, which is approximately UAH 16,000 per year, then in any case, the increase in yield on the deposit will cover this. And this is despite the likely slight weakening of the hryvnia, the economist adds.
The Diia app offers a service for buying military bonds. These are securities issued by the state during martial law. Military bonds have become an effective tool to support Ukraine’s economy and the Armed Forces. So on the one hand, you save your money, and on the other hand, you bring our victory closer. The cost of one military bond starts at UAH 900. The interest rate is 11 to 16 per cent per annum. The bonds are symbolically named in honour of the temporarily occupied cities and territories – Kherson, Melitopol, Mariupol, Crimea, etc.
Author – Anastasia Fedor
