The hryvnia strengthened by 3.5% in 2021, but began to fall.
The Ukrainian hryvnia began to depreciate sharply against the US dollar. The last time it was weaker was back in May 2021. However, since the beginning of 2022, the hryvnia-dollar chart began to change rapidly. If on January 1 the rate was 27.28 hryvnia per dollar, then on Friday, December 14, the NBU set the rate at the level of 27.73 hryvnia in the market.
On January 5, the Ministry of Finance, according to the schedule, redeemed old bond issues for almost UAH 13 billion. Part of these funds entered the foreign exchange market in the form of demand and increased pressure on the hryvnia. At the same time, in general, the government bonds portfolio of non-residents decreased by UAH 1.99 billion over the past week
Anna Zolotko, Director of the Department of Treasury Operations at Unex Bank
Vitaliy Minko, analyst and director of the Forex Club in Lviv, named the key factors that will contribute to the weakening of the hryvnia in the market:
- Due to high gas prices, an increase in imports is expected.
- Non-residents resumed leaving the country. Since the beginning of the year (in fact, in 3 business days), the government bonds portfolio of non-residents has decreased by almost UAH 2 billion.
The market also anticipates the possible emergence of liquidity on the market, which was not fully realized at the end of 2021 year, namely VAT refunds and budget funds to contractors, which may increase pressure on the hryvnia.
Vitaly Minko, Analyst and Director of the Forex Club in Lviv
What will affect the hryvnia in 2022
Prices in world markets. At the beginning of 2022, gas will have to be purchased from storage facilities in order to get through the heating season. Farmers will need to replenish stocks of fuels, lubricants and fertilizers.
This may have a negative impact on the hryvnia exchange rate at the beginning of the year. The outflow of the dollar may provoke a short-term weakening of the hryvnia to 29.50 and above.
Vitaliy Sivach, ICU Group Trader
Further fate of cooperation with the IMFwill show whether Ukraine will be able to pay off its external debts, especially if Eurobonds and government bonds become less attractive among investors.
Another risk is the curtailment of the monetary stimulus program by the Fed and the ECB. If the program is curtailed too quickly, explains Vitaliy Sivach, then global markets will begin to fall in prices for most risky assets. The trend of the dollar in Ukraine may strengthen. And a strong dollar in Ukraine will mean a weak hryvnia.
High inflation in the world — this is another risk for the weakening of the hryvnia. Since this could lead to higher interest rates, which will only accelerate the aforementioned threat.
However, the most important risk of devaluation is the possibility of a Russian invasion.
If tension will be removed in the near future, the hryvnia will return to strengthening in January-February. But if the tension grows, we should expect the opposite effect and a gradual withdrawal of non-residents from government bonds and investments in general,
— explains Anna Zolotko.
Apartments will have to be bought more expensive
Hryvnia inflation can greatly affect the real estate market in Ukraine. Developers can raise prices for housing in new buildings, and sellers can raise prices for apartments in the secondary market (housing that already had previous owners, mainly Soviet buildings). Development experts say that residential apartments and premises can increase in price by 10-15%. According to Mikhail Podvysotsky, the founder of the Concept Group real estate group, the biggest changes in prices will occur in April-June and October-December 2022.
In addition to changes in the hryvnia exchange rate, for real estate (both primary and secondary ) the Ukrainian market will also be affected by:
- The general macroeconomic situation.
- COVID-19 and the spread of the virus.
- Increase in prices for building materials.
- Prices for electricity, gas and water.
Economy-class housing, according to the specialist, will increase in price by about 3%, but secondary apartments in large cities can get up to 5% more expensive.
What will the price of the dollar be in Ukraine in 2022
Vitaliy Vavryshchuk, financial expert , regarding the dollar exchange rate, predicts that in 2022 the currency will average 27.70 hryvnia per dollar.
The exchange rate and the foreign exchange market will remain relatively stable next year. At the same time, there may be many episodes during the year when the hryvnia comes under pressure.
Vitaly Vavryshchuk, Head of Macroeconomic Research, ICU Group
Will the dollar fall
- The International Monetary Fund told what to expect from the dollar exchange rate in Ukraine. The IMF predicts that the dynamics of the hryvnia against the dollar in 2022 will stop at 27.43 hryvnia.
- In the consensus forecast from the Ministry of Economy, it was noted that the average annual exchange rate of the US dollar will reach 27.80 hryvnia, and at the end year — will grow to 28.10 hryvnia.
- In the budget for 2022, the average annual dollar exchange rate was set at UAH 28.60, at the end of next year the dollar is expected to cost UAH 28.70.
Whether the dollar will rise after the new year is unknown , however, experts are realistic — the future of the dollar is very specific.
I'm a little more optimistic about the 2022 exchange rate trend. However, I cannot say that the figures in the budget are unrealistic. Such levels are quite probable. First of all, this is a forecast that has some probability of coming true,
— says Anna Zolotko.
What will happen to the dollar by the end of the year, one can only predict — now many factors can affect the US currency. Time will tell whether the dollar will rise in price.Interesting! In recent years, the hryvnia forecasts have been higher in the budget than they actually are. For example, in the 2021 budget, the average rate was set at 29.10 per dollar, and the hryvnia was not weaker than 28.40.
Weekly exchange rate forecast: what is happening with the dollar
On Monday, January 10, the National Bank set a forecast for the dollar exchange rate for a week.
The dollar forecast in Ukraine for January 10-16, 2022 is the hryvnia exchange rate against the US dollar will be 27.50 hryvnia for 1 dollar.
Is it worth buying the dollar today
According to the National Bank, the official hryvnia exchange rate is record weak — the last time the Ukrainian hryvnia was weaker was in May 2021. The maximum dollar exchange rate in Ukraine in the entire history of an independent state was 1.83 hryvnia (in 1996), and the minimum was more than 30 hryvnia in 2015.