How strong will the hryvnia end the year against the dollar?

In the last week of November, the NBU allowed the hryvnia to weaken to a new record low of ₴41.60 per $1, according to ICU. The total foreign exchange deficit last week increased due to increased demand on the interbank market. Net purchases for the four days of the week increased by 41% compared to the previous week, to $408M.

In return, the NBU increased interventions by only 20% to $709M, allowing the hryvnia exchange rate to weaken to new record levels. At the end of the week, the official exchange rate weakened by 0.6% to ₴41.58 per $1. The cash value of the dollar in systemically important banks also increased by 0.6% (₴41.4−41.8).

“The key driver of the exchange rate weakening last week was the interbank market, which created a significant currency deficit. The NBU increased interventions but did not return the exchange rate to the usual autumn framework, below ₴41.5 per $1. It is unlikely that such a pace will continue, but a gradual devaluation to at least ₴42 per $1 by the end of December is likely,” the analysts concluded.