Analysts warn hryvnia may considerably weaken after elections in Ukraine

Analyst at the Alpari investment company Maksym Parkhomenko warns that the hryvnia, Ukraine's national currency, may considerably weaken if populists come to power in Ukraine as a result of presidential and parliamentary elections in 2019.

Read alsoExperts forecast forex rate in Ukraine after elections

"If populists, who promise mountains and marvels – encouraging policy, lower gas prices, etc., come to power, this will lead to wide budget gaps and, as a result, the hryvnia rate will weaken. Moreover, the change of the governor of the National Bank of Ukraine (NBU) may undermine the current conservative monetary policy and translate into the weakening of the national currency," he told Apostrophe, a Ukrainian news outlet.

Senior analyst at Forex Club Andriy Shevchyshyn says the change of government in Ukraine can be interpreted by investors as a negative signal. This will inevitably accelerate the withdrawal of funds from the country.

"And this will put pressure on the hryvnia," he said.

Expert at Dragon Capital's fixed income sales and trading department Serhiy Fursa predicts that the hryvnia rate will be determined by cooperation between the new government and the International Monetary Fund (IMF).

"Initially, because of fright, there may be slight, insignificant devaluation, and then everything will depend on cooperation with the IMF," he said.

Moreover, if the markets evaluate the election results positively, the hryvnia may continue strengthening in late April – early May.