Why can the dollar exchange rate rise significantly during the day?
At the end of March, the currency market in Ukraine will be in a state of heightened dynamics. Despite the market’s “nervous” behavior and daily fluctuations, the situation will remain controlled and without signs of a systemic crisis.
What to expect from the currency exchange rate next week, RBC-Ukraine spoke with the director of the financial markets and investment activities department at “Globus Bank,” Taras Lesovoy.
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Main points:
- Influencing factors: The market is balancing between seasonal currency sales by farmers before the planting season and high demand for currency from fuel importers.
- Role of the National Bank: The NBU will balance demand through currency interventions. The “managed flexibility” regime will help avoid sharp fluctuations in the exchange rate.
- Dollar behavior: High volatility is expected throughout the day (from increases to decreases), but the final exchange rate will remain balanced.
- Euro situation: The currency will be more stable than the dollar due to the global strengthening of the American currency. The expected global corridor is 1.14-1.15 dollars per euro.
- Forecast corridors (March 23-29): Dollar: 44.00-44.50 UAH (cash market), Euro: 50.50-52.00 UAH (cash market).
Currency exchange rate at the end of March: what Ukrainians should expect
According to Lesovoy, the situation in the currency market at the end of March will be dynamic but controlled. Despite some nervousness and daily fluctuations, there are no threatening scenarios or signs of a crisis.
The market will operate within a “managed flexibility” framework, with the National Bank playing a key role in curbing sharp fluctuations.
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Photo: currency forecast for the week (infographic RBC-Ukraine)
What influences the exchange rate
Currently, the market is experiencing two competing trends. On one hand, farmers are actively selling currency before the planting season, which helps stabilize the situation. On the other hand, there remains high demand from fuel importers. Their activity is setting the pace for the market today.
The situation could become calmer if tensions in the Middle East decrease and oil prices fall; however, international markets remain volatile for now.
What to expect from the dollar and euro
The last days of March may be “lively”: the dollar exchange rate could rise significantly during the day or decrease. However, this is merely volatility, not systemic instability. Thanks to the NBU’s intervention, the currency deficit will not push the exchange rate up too sharply.
“It’s important not to confuse increased volatility with systemic instability. The final dollar rate at the end of the day will likely remain more or less balanced. In other words, the market will be “stormy,” but without signs of losing control,” the expert notes.
The euro at the end of the month will appear more stable than the dollar. Its rate in Ukraine currently depends more on international platforms, where there is a trend of strengthening the dollar.
Forecast for March 23-29:
Cash dollar will hold within 44-44.5 UAH, euro – 50.5-52 UAH.
Daily fluctuations: In exchange offices, the rate may change by up to 0.3 UAH during the day.
Difference between buying and selling: In banks, the spread on the dollar will be up to 0.6 UAH, on the euro – up to 1 UAH. In exchange offices, it may be somewhat wider.
Overall condition: The market will remain active, but without sharp disruptions or upheavals thanks to the regulator’s actions.
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