REUTERS
The hryvnia rate will most likely have dropped to UAH 27 to the dollar by the end of summer, Novak said.
Chairman of the Committee of Economists of Ukraine, Candidate of Economic Sciences Andriy Novak says the Cabinet of Ministers of Ukraine and the National Bank of Ukraine (NBU) plan to artificially devaluate the hryvnia before the end of 2018.
"In spring and early summer, we saw a stable exchange rate of the hryvnia. Moreover, there was a slight strengthening. But this was only a temporary phenomenon. The trend will be changing: the hryvnia rate against the dollar will start falling, which we're already observing today. This is due to the fact that the Ukrainian government and National Bank have scheduled further devaluation of the hryvnia up until the end of this year, and it's artificial," the Ukrainian news outlet Glavred quoted the expert as saying.
"So, the average annual rate should be UAH 29.3 per U.S. dollar, whereas the rate target at the end of the year is set at UAH 30.1 to the dollar. Now, when the factor of export proceeds from farmers is no longer affecting things, the government and NBU have resumed the hryvnia's artificial devaluation: their plan to reach the target rate at UAH 30.1 to the dollar must be fulfilled," the expert said.
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In addition, Novak assessed the possible pace of the national currency devaluation. "Until the end of the summer, while the active holiday period continues, the government and NBU will accelerate the devaluation of the hryvnia, to make things less noticeable and cause less hype, so that fewer people complain. Thus, by the end of summer the hryvnia rate will most likely drop to UAH 27 to the dollar. Then – in the autumn and before the end of the year – the rate will be brought to the target, and our national currency will be depreciated to UAH 30.1 to the dollar," he said.
The economist also commented on the recent strengthening of the euro against the hryvnia.
"In addition, today the euro has strengthened to UAH 31. In order to forecast the exchange rate of the hryvnia against the euro, one must understand that it is a reflection of the euro rate against the dollar in the world market. So, there is approximately the same trend in both exchange rates," he summed up.