Experts predict that a gradual weakening of the national currency will continue / Photo from uapress.info
The Ukrainian hryvnia is expected to continue weakening gradually over the next 20 years with the annual rate tapering off from 10% down to 5%. This expectation came from Case Ukraine research experts, an independent non-profit public group specializing in economic research, macroeconomic policy analysis and forecasting.
"The past 20 years have seen the annual depreciation rate of the Ukrainian hryvnia remain around 10% [in relation to the U.S. dollar]. Given the reforms being initiated, our estimates are now based on the assumptions they will have a positive impact on the economic system. As a result, we are projecting an average depreciation rate to be around 5% for the coming 20-year period," the organization said in its recent report made as part of the project: "The Price of the State: Popular Economics" currently published on their website.
Experts noted that a gradual weakening of the national currency will continue. In large part, this process is determined by the fundamental malfunctions of the Ukrainian economy, including high consumption of imported energy and the poor quality of Ukrainian consumer goods.
Previously UNIAN had reported that from the time of transition by the National Bank of Ukraine (NBU) from the fixed exchange rate in 2014 to the flexible system of setting the hryvnia's currency market rate (including two months in 2015), the hryvnia lost 3.8 times its value against the benchmark U.S. dollar and hit a historic new low of UAH 30.01 per U.S. dollar.
It should be noted that after the introduction of the NBU restrictions and the disbursement of the first tranche by the International Monetary Fund under a new cooperation program with Ukraine, the hryvnia strengthened in less than two weeks with the exchange rate fluctuating within a range of UAH 21-23 per U.S. dollar in the past four months.