The rise in fuel prices has affected not only the prices at gas station pumps
The National Bank has raised the dollar exchange rate by a few kopecks for Friday, April 3. Meanwhile, the cost of the euro has sharply declined following the price increase.
What will the dollar and euro exchange rates be tomorrow, and how does the rise in fuel prices affect the currency? – in the material from RBC-Ukraine.
Also read: Euro surged, dollar fell: exchange rates for April 2 and how Trump’s statements affect the currency
Main points:
- Dollar rises: The dollar has minimally increased and will cost 43.81 UAH (+3 kopecks).
- Euro goes down: The euro has noticeably decreased in value – to 50.45 UAH (-37 kopecks).
- Pressure on the currency: The spike in fuel prices has triggered a chain reaction in the economy and intensified pressure on the currency market.
- Forecast: The market is gradually recovering from the price shock, but a quick “rollback” to previous prices should not be expected.
NBU exchange rates
For tomorrow, the National Bank has set the dollar exchange rate at 43.81 UAH (3 kopecks more than today).
The euro will decrease by 37 kopecks tomorrow. The exchange rate for the European currency on April 3 is set at 50.45 UAH.
What will the exchange rates be on April 3 (Infographic from RBC-Ukraine)
How fuel prices pressure the currency
The spike in prices at gas stations has provoked a chain reaction: other goods have also become more expensive, which has intensified pressure on the exchange rate, explained Taras Lesovoy, director of the financial markets department at “Globus Bank,” in a comment to RBC-Ukraine.
According to him, there are several key factors currently affecting the market:
- Importer demands: Energy traders needed significantly larger volumes of dollars and euros to purchase new batches of expensive fuel.
- Public behavior: Against the backdrop of rising prices, Ukrainians have started to actively buy hard currency as a reliable means of preserving their funds.
- National Bank’s reaction: To curb the surge in demand and prevent a sharp decline of the hryvnia, the NBU had to increase the volume of currency interventions in the interbank market. While the market usually required 600-800 million dollars per week, this figure jumped to 1-1.3 billion dollars in March.
At the same time, according to Lesovoy, the market is gradually adapting to the new circumstances. The initial stress from the sharp rise in fuel prices will diminish. However, this does not mean a quick return to previous prices.
“Even if the situation on the global fuel market stabilizes somewhat, there will be a cautious attitude towards any changes in Ukraine for a long time, and price corrections are unlikely to be swift,” the expert explained.
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