Breaking News
LAST CHANCE for Cyber Monday SALE: Up to 54% off InvestingPro! Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Ukrainian hryvnia to weaken on lower dollars inflows, wide trade deficit: Reuters poll

EconomyAug 08, 2019 10:21AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

KIEV (Reuters) - The Ukrainian hryvnia, which has firmed 9% since the start of the year on an influx of foreign capital into local bonds, will slip soon due to an expected drop in foreign money inflows and a wide trade deficit, a Reuters poll showed on Thursday.

Ukrainian analysts see the hryvnia averaging at 27.0 against $1 in three months and at 27.90 in six months compared to the current level of 25.42/$1.

"Strengthening is not the result of structural changes in the economy when we begin to export more and import less, or when we significantly change the investment climate, which attracts direct investments," said Serhiy Fursa, a Kiev-based investment banker from Dragon Capital.

It is the result of an influx of portfolio investors which "is not a stable trend, sooner or later it will end and the hryvnia will have to return to its usual state".

The analysts forecast Ukraine's current account deficit at $4.1 billion in 2019 and $5.1 billion in 2020 compared to $4.3 billion in 2018, while its economic growth will slow to 2.9% this year and 3% next year after 3.3% last year.

Non-residents have invested $3 billion since the start of the year into local Ukrainian government bonds, which offered yields at 16-18% amid annual inflation at about 9%.

The hryvnia performed best in June-July, gaining 7.1% when foreigners increased their investments and bought local securities worth $1.8 billion.

Demand for hryvnia bonds was boosted by investor optimism after the presidential election and after the international central security depository Clearstream had connected the Ukrainian market to its network on May 27, giving non-residents an easy and quick access to buy Ukrainian domestic debt.

Analysts say they do not expect such a substantial inflow in the remaining five months of the year because the Finance Ministry will reduce the volume of new bond issues in order to avoid exceeding its parliament-approved debt ceiling.

The ministry will also become more decisive in decreasing yields following the central bank's interest rate cut last month, they say.

"In the autumn we expect an increase in the pressure on the hryvnia due to a rise of devaluation expectations and the higher activity of importers," said Oleksandr Martynenko, an analyst at the ICU investment company.

Importers usually increase their seasonal demand for dollars mainly for buying more energy resources before the cold season.

In 2018 the hryvnia started weakening in August and lost 5.4% by September 1.

Ukrainian hryvnia to weaken on lower dollars inflows, wide trade deficit: Reuters poll
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email