Ukraine entered the new year with a record low official exchange rate of the hryvnia: over 42 UAH/USD. Both the market cash and non-cash exchange rates crossed this threshold two weeks before the end of December. Since then, the dollar has continued to rise, exceeding an average of 42.50 UAH in cash sales at the beginning of January, as reported by TSN and Kontrakty.UA.
Another piece of news this week is that not only the hryvnia but also the euro has depreciated against the dollar. While the European currency is slightly more expensive than the American one, some financial analysts are already discussing the inevitable parity of the rates.
What to expect in the upcoming week of January, which is currently more profitable – the dollar, the euro, or are there other options? Read about it in TSN.ua's weekly analytical project.
You will also find out:
- what is happening in the cash currency market;
- what to expect from the exchange rate in the week from January 6 to 12;
- whether to sell or buy cash currency.
Our experts: member of the Economic Discussion Club Oleg Pendzin, head of the secretariat of the Entrepreneurs' Council under the Cabinet of Ministers economist Andriy Zablovskyi, and financial analyst, member of the Ukrainian Society of Financial Analysts Andriy Shevchishin.
What is happening in the currency market
The dollar continued to rise on December 30 and 31, and even on January 1. According to specialized websites finance.ua and minfin.com.ua, during these three days, the cash dollar gained another 22 kopecks in sales and 7 kopecks in purchases: on average, the rate increased to 42.50 and to 41.78 UAH/USD, respectively. By the end of the week, the dollar had increased further: to 42.57 in sales and to 41.95 in purchases.
The highest selling price of the dollar was 42.75 UAH (+25 kopecks for the week), and the lowest was 42.35 UAH/USD (also +25 kopecks). The maximum purchase rate was 42.30 UAH (and here +25 kopecks).
In December of last year, the cash dollar rate increased by 60 kopecks in sales and by 40 kopecks in purchases. Throughout 2024, the cash dollar appreciated by 4.30 UAH in sales and by 4.10 UAH in purchases.
The cash euro rate rose on Monday and Tuesday, December 30 and 31. It increased on average by 20 kopecks in both sales and purchases: to 44.44 and 43.72 UAH/euro, respectively. Subsequently, the euro gradually depreciated, with a selling rate of 44.16 UAH/euro established on Sunday, January 5, and a purchase rate of 43.40 UAH/euro. As a result, over the week from December 30 to January 5, the euro depreciated by 9 kopecks in sales and by 12 kopecks in purchases.
In December, the euro depreciated by 10 kopecks in sales and by 15 kopecks in purchases; however, throughout 2024, the euro currency appreciated against the hryvnia by 1.55 UAH in sales and by 1.65 UAH in purchases, with rates on January 1 of the previous year being 42.75 and 41.90 UAH/euro, respectively. Interestingly, from May to mid-September of last year, the euro rapidly appreciated, reaching a maximum cash rate of 46.65 UAH in sales and 45.90 in purchases on September 16. Subsequently, a prolonged downward trend began.
On the black market, according to the "minyaylo" service (miniaylo) on the finance.ua website, where requests for buying and selling cash currency between individuals are published, the dollar only appreciated in sales. Over the week from December 30 to January 5, the rate increased by 35 kopecks to 42.65 UAH/USD. In purchases, the minimum for the week occurred on January 1: only 42 UAH/USD (-32 kopecks) and the maximum on January 5: 42.45 UAH/USD (+13 kopecks for the week).
The euro on the black market continued to depreciate. If on Monday, December 30, it was 44.44 UAH/euro in sales and 44.25 in purchases, then on Sunday, January 5, it was already 44.22 (-24 kopecks for the week) and 44.05 (-20 kopecks).
The National Bank ended the last year with a record rate of 42.04 UAH/USD, subsequently lowering it to 41.97, but on Friday, January 3, it was again 42.04. On Monday, January 6, the regulator set the official rate at 42.09 UAH/USD (+15 kopecks for the week).
The official euro rate from December 30 to January 3 decreased by 37 kopecks, to 43.38 UAH/euro. On Monday, January 6, the euro further depreciated to 43.33 UAH/euro (-42 kopecks for the week).
The dollar/euro ratio decreased over the week from 1.04 to 1.03 dollars per euro.
Andriy Shevchishin noted that the week between December and January was calm compared to the previous week when the National Bank sold currency reserves of 1.6 billion dollars, which is more than what had previously occurred in a month.
"In December, the NBU sold 5.284 billion dollars from reserves, which is a record monthly volume in history; this is why the hryvnia did not collapse but only increased above 42 UAH/USD," analyzes Andriy Shevchishin. – "Can we afford such expenditures? Yes. At the end of the year, currency reserves amounted to 42.8 billion dollars, which is sufficient. The main sales were to satisfy the demand for currency from importers, the population, and state companies (including defense)."
According to the expert, such significant expenditures from the NBU reserves should not occur in January.
What to expect from the exchange rate
Experts anticipate that this week will see a further depreciation of the hryvnia, and January may become critical: it will become clear whether the hryvnia will depreciate gradually or if there will be a sudden plunge below 43 UAH per dollar.
In Oleg Pendzin's opinion, the trend toward depreciation is evident in the actions of the National Bank, which set a noticeably lower official hryvnia rate for Monday, January 6, compared to before the weekend.
"The official rate serves as a benchmark for the interbank market," analyzes Oleg Pendzin. – "The cash rate is more dependent on the demand for currency from the population, which is currently insignificant in the new year. This week, large volumes of currency sales are expected from the Ministry of Finance to finance social payments, which will further depreciate the hryvnia, pulling the interbank and cash markets along with it. However, not significantly; the average selling rate will not exceed 42.60 UAH/USD."
Andriy Shevchishin states that currently, the supply of currency on the interbank market has decreased by 30%, while demand has dropped by 70%, so there is no rush on the cash market.
"In the week from January 6 to 12, a revival of business activity is expected, while the cash market will remain quiet for now. It is difficult to say how long this will last, but on average, the cash dollar will not drop below 42.50 UAH in sales," predicted Andriy Shevchishin.
Andriy Zablovskyi noted that the exchange rate corridor is gradually shifting upward, already noticeably holding above 42 UAH/USD on the interbank market. It is evident that there is a slow depreciation of the hryvnia, which will continue on the cash market. The expert emphasized: while the transitional period from holidays to increased business activity continues, it is difficult to say whether this week will see a rise in the dollar above the current 42.55 UAH per unit, or if the current average rate will hold for some time.
To sell or buy currency
Experts have summarized last year's results regarding the use of various financial instruments for investments in their advice.
Oleg Pendzin, an advocate for investments in hryvnia, provided the following figures.
"A year ago, one cash dollar was sold on average