Ukraine hryvnia to stay stable, then firm
A senior central bank official says
Ukraine`s hryvnia currency will remain stable at 5.5-6.0 to the dollar until the end of the year and will then strengthen in the second half of 2009, a senior central bank official was quoted as saying on Monday, Reuters reported.
"By the end of this year, it is clear to all specialists that the rate will fluctuate within 5.5 and 6.0 with a trend towards stabilisation," central bank deputy chairman Oleksander Savchenko told the weekly Biznes.
He ruled out as improbable any decline in the hryvnia to weaker than 7.0 -- near its record low last month.
"I rule out any rise in the dollar to 8-10," he told the daily. "A rate of 7 can take place only in extraordinary circumstances and that is also unlikely."
Central bank chief Volodymyr Stelmakh said last month that the hryvnia would slip no further than 6.0 to the dollar by the end of the year. The currency has recovered from its low point to trade now at 5.78-5.79 amid practically daily central bank intervention in its support.
"It is very difficult to predict where the market will lead from January to May (2009)," Savchenko told Biznes. "All I can say is that from the middle of next year, the hryvnia will start to strengthen."
Savchenko said a dip of nearly 20 percent in the hryvnia`s value since September, along with government moves to cut imports, would reduce a foreign trade deficit rising for three years amid a stable currency and a consumer credit boom.
"Even now, we can foresee an improvement in the situation with the trade balance," he told the weekly. "I believe that the trade balance will be approaching zero in October and it will be positive in November."
The State Statistics Committee noted a trade deficit for goods of $1.7 billion in September, with the figure standing at $14.3 billion over the first nine months of the year. Trade in services yielded a positive balance of $4.0 billion over nine months, reducing the deficit to $10.3 billion.
"Next year, it will not be hard for the government to reduce imports somewhat and eliminate the negative trade balance," Savchenko said. "The (hryvnia) rate helps and limits on consumer credits will also influence this."