U.S. dollar in Ukraine costs less than UAH 25 for the first time in three years

The hryvnia to U.S. dollar exchange rate in the interbank foreign exchange market on July 31 strengthened to UAH 24.9845/$1 from UAH 25.0919/$1.

The deputy chairman of the board of First Investment Bank, Vladyslav Kravets, told Interfax-Ukraine that the exchange rate in the interbank market on July 31 started with UAH 24.95-24.98/$1, and by the middle of trading it was UAH 25.075-25.115 per $1.

According to him, the steady trend to the hryvnia exchange rate strengthening due to the growth of non-residents' investments in hryvnia-denominated government domestic loan bonds will continue in the near future.

"The seasonal growth in foreign currency earnings from agricultural exports has not gone beyond the figures that were last year or the year before, therefore the main driver for the current strengthening of the hryvnia exchange rate is the inflow of foreign investment in hryvnia-denominated government bonds. In the near future, the hryvnia exchange rate will continue to strengthen. The expected mitigation of the monetary policy of the Federal Reserve System and the European Central Bank, in response to a slowdown in economic growth, will stimulate the flow of investor funds to emerging markets, including Ukraine. If the NBU does not actively absorb the surplus of currency from the market to reserves, the hryvnia exchange rate will soon aim at around UAH 24/$1," the banker explained.

Since the beginning of the year, the hryvnia exchange rate has strengthened by almost 10%, in particular by almost 4% over the last ten days.

The last time the hryvnia to U.S. dollar exchange rate was below UAH 25/$1 on August 12, 2016.