The strengthening of the hryvnia exchange rate could resume after the New Year and Christmas holidays, bankers interviewed by Interfax-Ukraine say.

"The hryvnia "goes on New Year financial vacation" at UAH 23.69/$1, which corresponds to a nominal revaluation of 14.5% at the end of the year. With the continued demand for government domestic loan bonds from non-residents, the exchange rate could not only stabilize, but also begin strengthening," director of the treasury of Bank Credit Dnipro Oleh Kurinny said.

According to him, the sharp change in the trend of long-term strengthening of the hryvnia to its rapid weakening to a three-week low occurred under the influence of the time pressure of market participants due to the non-standard working week ending the fiscal year and the start of Christmas holidays in Europe and the United States.

"The record-high daily purchase of foreign currency by the regulator in the amount of $700 million on December 26 and the subsequent exchange rate reversal were perceived by the market as a signal to increase hype: the cash market sharply boosted dollar quotes and increased the spread, which, combined with a period of VAT refunds and finalization of annual financial settlements by the market participants, had the effect of a released spring. As a result, dollar quotes went into growth, fueled by speculative activity," he added.

Raiffeisen Bank Aval senior analyst Mykhailo Rebryk believes that the hryvnia depreciation is situational in nature, since there are no fundamental or informational reasons for its observed weakening.

"The devaluation takes place in the "thin" market, that is, in small volumes, which to some extent indicates the unstable and sometimes speculative nature of such a movement. Based on the nature of the movement, the nature of transactions in the interbank market, which provided growth, and the fact that quotes in the cash market are ahead of the interbank market, I am inclined to believe that the current weakening of the hryvnia is situational," he said.

At the same time, Rebryk added that if there is no negative informational support, then with the beginning of the "new season" of placing government domestic loan bonds and the return of non-residents to the market, the likelihood of a renewed revaluation trend is high.