In Ukraine, the euro began to rise in price within a week the exchange rate of the cash euro to the hryvnia increased by 2%, i.e. by 80 kopecks. The exchange rate of the cash dollar remained almost unchanged both in sales and in purchases. But stability was only on the official market, that is banks and POVs (currency exchange points), on the “black market” the trend of the dollar exchange rate changed to the opposite every day, first of all in buying. The fluctuations were significant – within 20 kopecks. in the purchase and 10 kopecks. on sale
What is happening on the foreign exchange market, whether it is worth investing in the currency that is currently more profitable: the euro or the dollar, read in the weekly analytical project of the TSN.ua website.
You will learn:
- what is happening in the cash currency market;
- what to expect from the course next week;
- sell or buy cash currency.
Our experts: Oleg Pendzyn, a member of the Economic Discussion Club, Oleksandr Okhrimenko, president of the Ukrainian Analytical Center, and Andrii Shevchyshyn, head of the analytical department of the International Academy of Stock Trading.
What is happening in the market
According to information from specialized sites such as finance.ua and minfin.com.ua, During the week, the cash euro rose in price in banks and POVs in sales from UAH 40.97 to UAH 41.77 (+80 kopecks), and from UAH 40.25 to 40.85 (+60 kopecks) in purchases.. The spread (the difference between the buying and selling rates) increased by half – from 61 to 92 kopecks. According to Oleksandr Okhrimenko, this may indicate a tendency for further appreciation of the euro currency.
The dollar fell by an average of 4 kopecks per week. on sale (up to UAH 37.33/dollar), the purchase rate did not change – UAH 36.76/dollar.
The most expensive to hand over cash euros on the “white market” are banks and POVs, you can get 41.16 (+51 kopecks per week) UAH/euro, the cheapest buy – 41.40 UAH/euro (+55 kopecks). Dollar – 37 (-5 kopecks) and 37.13 (-7 kopecks) UAH, respectively. As before, the currency is available for sale both at bank counters and at exchange offices, but at a rate below the market average (37.33 hryvnias for the dollar, 41.77 for the euro) it is difficult to find it, especially if it is several hundred dollars or euros.
For those who do not want to overpay, the illegal market can be an alternative. According to the “miniaylo” service of the finance.ua website, where applications for the purchase and sale of cash currency between individuals are published, the exchange rates here are more profitable: in the purchase by 15-20 kopecks. more expensive, on sale 10-15 cheaper, both for the dollar and for the euro. We calculated: when exchanging 500 dollars or euros with illegals, the savings will amount to no more than 100 hryvnias.
But Oleksandr Okhrimenko warned: money changers are interested in devices with significant amounts, and for newcomers to this market there is a danger of encountering fraudsters.
The official exchange rate of the National Bank is stable at UAH 36.56/dollar. The official exchange rate of the euro fluctuates in accordance with the quotations of the euro/dollar pair.
On Monday, July 17, the NBU set the exchange rate at UAH 41.05/euro (+ UAH 1.13 compared to July 10).
What to expect in the coming week
All experts predict that significant fluctuations in the dollar cash rate are not expected for another week. However, they note: the current stability cannot last long, because a meeting of the board of the National Bank is scheduled to take place on July 27, at which important macroeconomic issues that can affect the exchange rate will be discussed.
There are two main factors that can devalue the hryvnia: the National Bank’s rejection of a fixed exchange rate for the dollar and a reduction in the discount rate, i.e. the interest rate at which the regulator lends hryvnia to commercial banks. We will remind, now it is 25% per annum, and it can be reduced, according to experts, by 2-3%.
As Oleksandr Okhrimenko explained, these measures are foreseen by the new strategy of the NBU, which was adopted in May 2023, taking into account the impact of Russian aggression on the Ukrainian financial system. But it is not known when they will become a reality.
Oleh Pendzyn believes that no drastic actions from the regulator should be expected yet.
“I do not believe that the fixed exchange rate of the dollar will soon be abolished, because the main foreign exchange revenues of the state budget in wartime are financial aid from Western countries, and not income from the own economy, but it should be the other way around. An alternative could be a reduction in the discount rate, and when it will happen , it is also difficult to predict. The lower the rate, the greater the supply of the hryvnia, the greater the demand for the currency. And this means its price increase. The National Bank does not need it now,” Pendzin analyzes.
Sell or buy currency
Experts have different opinions.
Oleksandr Okhrimenko advises to buy the euro because he expects its price to rise further. Okhrimenko explained: foreign financiers believe that the euro is undervalued against the dollar by 36%. Therefore, in his opinion, in about six months it will be possible to profitably exchange the euro for hryvnias. Estimated income can be approximately hryvnia for every euro.
“The dollar is no longer interesting, if you buy a dollar now, you may not earn anything until the end of the year,” Okhrimenko added.
To those who do not believe in the long-term stability of the hryvnia, Andrii Shevchyshyn suggests buying dollars while they are cheap.
“The euro is a less stable currency than the dollar. It is possible to make money from its temporary rise in price, but it is not a fact. Investing in dollars, you will not lose your money, but you will have to wait a year or more for the profit. But it is not worth selling the currency now unless absolutely necessary.” – says Shevchyshyn.
Oleg Pendzyn believes that it is not the right time to buy currency at all: it is more reliable and profitable to open a short-term, 3-month hryvnia deposit in a bank that offers more than 15% per annum.
“This can exceed inflation by 1-3 percent, that is, you will get a guaranteed profit,” argued Pendzin.
We calculated: every thousand hryvnias on deposit at 18% per annum will bring a profit of 45 hryvnias in three months.
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