August 08, 2019 | Cbonds
|The rally of the UAH/USD pair in the wake of rampant foreign capital inflow into local government debt ran into resistance at 25.5 after the National bank of Ukraine (NBU) increased absorption of accompanying foreign currency (FX) liquidity. |
Though sticking to position not to interfere in the market trend of the hryvnia consolidation, the central bank afforded to bend this rule and bought USD0.51bn in the interbank foreign exchange market in the period from July 29 to August 2, almost twice more than a week earlier.
After follow-up corrective slide to vicinity of 25.5 by the end of last week, UAH has found support from active exports revenue sales, mainly rendered by agricultural producers. A season of salary repayments, boosting switches from foreign into local currency, also added support to the pair.
Looking forward, we see current situation on the market as fragile. Hryvnia largely derives its strength from still high expectations of fresh foreign capital inflow into local debt. Such expectations did partially live up during the last FinMin’s primary auction, where attractive to foreign investors 3y bonds were sold. On the back of post-auction FX sales, UAH moved up to 25.4 against the USD by the end of Wednesday (August 7). On the other side we see growing current account deficit is weighing on the local currency.
|Full company name||PJSC "UkrSibbank"|
|Country of risk||Ukraine|
|Country of registration||Ukraine|