The devaluation of the Hryvnia continues: The official exchange rate Is now nearly 42 UAH/USD

The interbank exchange rate has surpassed 42 UAH/$, with the card exchange rate approaching 43 UAH/$, while the official rate stands at 41.99 UAH/$. Businesses are holding onto dollars, anticipating further devaluation.

As the end of 2024 approaches, the dollar is becoming more expensive, and the hryvnia is depreciating. On December 23, trading on the main interbank platform (Bloomberg) opened at 41.96 UAH/$, but by midday, the market broke through the psychological barrier of 42 UAH/$, reaching 42.02 UAH/$. This marks a first in Ukraine’s financial history. After lunch, most transactions were made at 42.04 UAH/$, with a brief peak at 42.05 UAH/$. However, the National Bank of Ukraine (NBU) fixed the rate at 42.04 UAH/$ and maintained it until the close of trading despite increasing demand and limited supply of foreign currency.

At times, Bloomberg showed no dollar sellers except for the NBU, as indicated by a dash in the central blue window on the trading screen. This means there were no currency sellers, not even speculators, leaving the NBU as the sole seller at the fixed rate of 42.04 UAH/$.

By the end of the day, the NBU raised its official exchange rate by 11.5 kopecks, from 41.8761 UAH/$ to 41.9910 UAH/$, nearly reaching 42 UAH/$. This is a new historical record for the hryvnia-dollar pair.

Trading volume on Bloomberg rose from $246.5 million on Friday to $286.6 million, the highest in the past five months, with the last peak recorded on July 19 at $292 million. According to treasurers, the NBU supplied about 90% of the total dollar demand on the interbank market.

“This clearly demonstrates strong devaluation expectations not only among the general population, who are buying up cash dollars, but also among businesses. There is no mandatory currency sale requirement in Ukraine; exporters must repatriate their earnings but are not obliged to sell immediately. With the exchange rate rising, businesses will aim to convert to hryvnias at peak rates. Everyone remembers that the state budget was based on 42.10 UAH/$, and it seems everyone is waiting for that level. We’re not far from it now, and at the current pace, we could reach or exceed 42.10 UAH/$ this week. Meanwhile, $1.1 billion from the IMF has entered Ukraine, and the authorities will likely aim to convert it to hryvnias at the most favorable rate,” explained the head of the treasury department at a major bank.

On the black market, morning trading ranged from 42.0-42.31 UAH/$ and reached 42.2-42.35 UAH/$ by 4 PM.

The maximum cash exchange rate in bank branches for selling dollars reached 42.55 UAH/$, set by Poltava-Bank. Average branch rates for buying and selling ranged from 41.70-42.30 UAH/$, with state-owned banks PrivatBank and Oschadbank offering 41.60-42.20 UAH/$ and 41.75-42.30 UAH/$, respectively.

Card dollar selling rates in banks are nearing the new psychological threshold of 43.0 UAH/$. For instance, Akkordbank set its rate at 42.90 UAH/$, while Raiffeisen Bank remained slightly lower at 42.62 UAH/$. Average buy-sell rates for card transactions reached 41.63-42.21 UAH/$.