After winter-spring jumps in the exchange rate against the background of the war in the Middle East and the sharp rise in oil prices in the world, for a certain period of time in late June and early July, a deceptive calm was established in the currency market. But do not rush to make important decisions, because perhaps this calm time is coming to an end and there will be new currency movements. However, the main question that has been worrying Ukrainians for several weeks is where exactly the dollar will jump up or down?
Despite the fact that we have observed relative equilibrium, new powerful trends are forming behind the scenes of the financial sector. Bankers and financial analysts are signaling that the coming days may be decisive for a new push in the price of the national currency.
However, despite financial stability, which remains the main priority for both the state and each citizen, there is an information background that is becoming increasingly tense. Rumors about sharp jumps in the exchange rate up or down generate anxiety that threatens to develop into uncontrolled excitement. Right now, it is important to understand the real market mechanisms in order not to become a victim of your own emotions and preserve your savings.
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National Bank at the helm: a strategy of managed flexibility
The main price maker and guarantor of stability in Ukraine remains the National Bank . By switching to a regime of managed flexibility, the regulator deliberately abandoned a rigid fixation, allowing the market to seek balance. However, this does not mean that the situation is left to its own devices. The NBU has already announced the release of a new 2,000-thousand-hryvnia banknote and continues to closely monitor supply and demand, cutting off dangerous exchange rate peaks.
The regulator’s daily interventions in the interbank market are the very safeguard that prevents the situation from getting out of control (you can see the current exchange rate in the table below). By selling currency from reserves, the country’s main bank satisfies the structural deficit. Changing the official exchange rate is now not a sign of weakness, but rather a tool for the economy to adapt to new macroeconomic realities.
However, the regulator’s resources are not unlimited. The strategy is not to burn reserves for the sake of a certain number on the scoreboard, but to smooth out fluctuations. Therefore, a change in the trend in the coming days is a completely natural step within the framework of this long-term policy.
Market Pulse: What’s happening on exchanges right now
Meanwhile, since July 11, the retail market has been living by its own, more emotional laws and has already jumped to the mark of 44 hryvnias 50-55 kopecks. per one dollar unit. But right now, while we were preparing this material, the rate in exchange offices and cash desks of commercial banks is starting to react to the zone of minimal correction downwards due to information stimuli, about them in a separate block below. Spreads (the difference between the purchase and sale price) are widening, which indicates growing uncertainty among financial institutions themselves.
The purchase of currency by the population traditionally increases against the background of minimal depreciation and alarming news about new growth. This psychological factor creates additional, often artificial pressure on the cash market. It is important to understand that local jumps in the cash rate do not always mean that a large-scale devaluation of the hryvnia is inevitable. More often, this is just an attempt by speculators to profit from the panic mood of citizens.
The European currency deserves special attention. Which also, starting from July 9, against the background of global economic news, the euro demonstrates its own growth dynamics in the zone of 51-51.1 UAH., which sometimes contrasts with the movement of the dollar, outpacing the growth dynamics by several days. For Ukrainians who diversify their savings, fluctuations in the euro/hryvnia pair now look even more unpredictable due to the double dependence – on the internal state of the economy and the global Forex market.
Exchange rate forecast: influencing factors and bankers’ expectations
Communicating in specialized financial forums and groups, leading Ukrainian bankers form a rather cautious but pragmatic exchange rate forecast for the coming weeks. No one expects catastrophic collapses, but the trend of gradual weakening of the national currency remains the base scenario in the long term. Currently, several key factors are simultaneously pressuring the hryvnia.
Among the main market drivers, experts identify the following:
- External financial assistance: The rhythm of receipt of tranches from international partners remains the foundation for replenishing gold and foreign exchange reserves.
- Export earnings: This is a critically important element of the balance sheet. Bankers particularly emphasize that significant foreign exchange earnings are expected at the end of July from the sale of new grain crops, which should become a powerful stabilizing factor.
- Psychological factor: Business and population expectations regarding future inflation and the duration of geopolitical challenges directly shape the demand for currency and the rapid spending of free hryvnia cash in enterprise cash registers on goods and services.
It is the factor of agricultural exports and the significant foreign exchange earnings received that can become the annual positive downward turn of the exchange rate, which, although not for a long time, will still cool the overheated cash market. When the currency from exporters enters the country en masse, the pressure on the interbank market will significantly decrease, which will certainly be reflected in the figures in street exchangers and give ordinary citizens a chance to buy “at pleasant prices” before the start of the cold season.
How to act so as not to lose money
In conditions when financial stability is being tested, the worst financial advisor is panic buying at the “peak of the price – the so-called highs”. The history of the Ukrainian currency market has repeatedly proven: those who buy dollars at the peak of the excitement before the fall almost always record losses after the situation stabilizes. Market volatility is the norm, not a sentence.
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To protect your funds in the coming days, follow a few rational rules:
- Do not buy currency in large batches on emotions. If you do not need all the dollars or euros in one day for urgent payments tomorrow, wait a few days or weeks, and buy by the day of the week or at the end of each new week during the summer harvest period, until the market finds a new balance, we can average your purchase price.
- Diversify your portfolio. Distribute your savings between hryvnia deposits (which still cover inflation), dollars, euros, and government bonds to have working capital – hryvnia and savings in different currencies to protect against global shocks in different parts of the world.
- Focus on fundamental factors. Remember the upcoming July revenue from grain exports and stable tranches from partners – this money works to protect your hryvnia savings and will allow you to buy currency at cheaper prices.
Exchange rate swings are inevitable, but they can be predicted and managed by dividing them into days and weeks. Keep a cool head, analyze trends, and remember that financial stability starts with informed decisions.
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