Imposing martial law to entail additional pressure on hryvnia exchange rate, no deep devaluation predicted
Imposing martial law in 10 regions of the country would entail an additional pressure on the hryvnia exchange rate, but there would not be deep devaluation of the national currency, according to bankers polled by Interfax-Ukraine.
"In the absence of additional economic and political shocks and with a timely and balanced exchange rate correctional policy of the National Bank, the exchange rate will soon be fixed in the area of UAH 28/$1,", Director of the Treasury at Credit Dnepr Bank Oleh Kurinny said.
At the same time, he added that the introduction of martial law could cause a short-term increase in situational imbalances of supply and demand of currency. But if the regulator controls the situation on the interbank market by participating in trading with various tools and leveling out peak imbalances, the rush sentiment of the cash market reinforces the speculative component and creates the effect of a self-unwinding spiral.
At the same time, Kurinny said that the most significant factors affecting the exchange rate pace are price trends for key Ukrainian exports (grain and metal products) and imports (energy), inflation and devaluation moods of business and the population, as well as the course of cooperation with the IMF, which has experience of providing financial assistance to countries in which the military conflicts took place.
Board Chairman of RwS Bank Vladyslav Kravets said that if during the week the NBU does not enter the interbank market with support for the hryvnia, the national currency may become cheaper by the end of the week, reaching UAH 29/$1.
Chairman of the Board of IBOX Bank Halyna Kheylo said that the NBU has enough tools to support the hryvnia exchange rate and will not allow a sharp devaluation.
"In the near future, the volatility of the hryvnia exchange rate will significantly increase due to the introduction of martial law, but the NBU has a wide range of tools and a sufficient amount of reserves to keep the hryvnia exchange rate from a sharp devaluation. It is unlikely that the hryvnia exchange rate will reach UAH 30/$1," Kheylo said.