During the first week of March, Ukraine’s currency market is adjusting to new exchange rates, with the US dollar expected to hover around 43 UAH and the euro above 51 UAH. This stabilization is attributed to the National Bank of Ukraine’s managed flexibility regime and the onset of the tax payment season, leading to a controlled equilibrium in the market.
Key Highlights:
- Exchange Rate Ranges: From March 2 to March 8, the dollar is projected to fluctuate between 42.5 and 43.5 UAH, while the euro is expected to range from 50 to 52 UAH.
- Stability Factors: The start of the tax payment season compels businesses to sell foreign currency earnings, balancing supply and demand.
- Reduced Volatility: While currency fluctuations are anticipated, significant swings are not expected. There is currently no overwhelming demand that could drive prices higher.
- Daily Changes and Spreads: Daily exchange rate shifts are expected to be between 0.05 and 0.3 UAH. The difference between buying and selling rates at exchange offices will be up to 0.6-1 UAH for the dollar and 1-1.3 UAH for the euro.
- Overall Environment: The macroeconomic situation remains cautiously positive, with the toughest winter period behind, fostering a recovery in business activity and moderate inflation.
According to Lesovyi, the initial days of March will see decreased volatility as the market enters a phase of relative balance, influenced by several key factors:
Tax Payment Season: Businesses are required to pay taxes, which encourages the sale of foreign currency earnings and naturally balances the ratio between sellers and buyers.
International Reserves: The current level of reserves allows the National Bank to conduct targeted interventions to stabilize the market.
Macroeconomic Background: With the end of the harshest winter period, conditions are ripe for a resurgence in business activity, and inflation is expected to remain moderate throughout March.
Photo: Currency forecast for the week (infographic by RBC-Ukraine)
The internal euro price for the upcoming week will depend on global dollar/euro quotes, anticipated to range between 1.17 and 1.19, alongside the internal hryvnia/dollar exchange rate. The benchmark for the euro remains around 51 UAH.
As for the dollar, despite occasional volatility, there are no fundamental reasons for significant depreciation. Approximately 60% of global capital is held in this currency, and the US economy continues to be the strongest worldwide.
Market Indicators for the Week (March 2–8):
- Exchange Rate Ranges: The dollar is expected to stay between 42.5 and 43.5 UAH, with the euro between 50 and 52 UAH.
- Daily Changes: Fluctuations are projected to be between 0.05 and 0.3 UAH, depending on the market segment.
- Buying/Selling Spread: The spread at exchange offices will be up to 0.6-1 UAH for the dollar and 1-1.3 UAH for the euro.
- Weekly Deviation: Average exchange rate fluctuations should not exceed 1-1.5% from the week’s starting figures.
Note: This material is for informational purposes only and does not constitute financial or investment advice. Investments carry risks, including the potential loss of capital. RBC-Ukraine is not responsible for financial decisions made based on this material. It is recommended to consult a licensed financial advisor before making any investment decisions.
The Ukrainian currency market is stabilizing as it adjusts to new exchange rates for the dollar and euro. Key factors include the tax payment season and controlled market interventions by the National Bank of Ukraine.