Provision of new tranche by IMF to support hryvnia exchange rate – bankers
The provision of the third tranche of around $1 billion (SDR 716.11 million) by the International Monetary Fund (IMF) would help to stabilize the hryvnia exchange rate, according to bankers polled by Interfax-Ukraine.
"Of course, the IMF's decision for the hryvnia is more than positive. In the morning the currency market reacted by the fall in the U.S. dollar exchange rate… I think in coming days the National Bank would have a good chance to boost forex reserves not only using the Fund's money, but thanks to holding auctions to buy currency, as supply of foreign currency on the interbank market now considerably exceeds demand," Deputy Board Chairman of Bank Credit Dnepr Serhiy Volkov said.
He said that the hryvnia exchange rate fluctuations in October and November would be small – within UAH 1-1.50.
Senior economist of Alfa-Bank (Ukraine) Oleksiy Blynov believes that the IMF funds would stabilize, but not strengthen the hryvnia.
"In the current macroeconomic conditions the receiving of the new tranche from the IMF can only stabilize, but not strengthen the hryvnia exchange rate. Weakness of the hryvnia in the past year was caused by the following fundamental factors: the reduction of exports and the absence of a large inflow of private capital to the country," he said.
This autumn the hryvnia would retain increased volatility within medium range – fluctuations up to 10%, the expert said.
Analyst of the treasury of Raiffeisen Bank Aval Serhiy Drobot has the same opinion.
He said that the provision of the new tranche by the IMF is evidence of the positive assessment of current processes in Ukraine and readiness to continue cooperation. This is a positive signal for investors, he added.