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The fall of the hryvnia in recent days was not backed by any economic indicators

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Bankers are not ruling out the possibility of the hryvnia falling to 9 UAH/USD on the inter-bank currency market by the end of September.
 
"The inter-bank market is hostage to the cash market. It is very difficult to forecast, but the reference point as of today is [9 UAH/USD]. In general, this is a strange fall (the hryvnia has been falling for the past two weeks) because very small amounts (about UAH 14 billion) remain in the correspondent accounts of banks as of today," said Oleksandr Okhrymenko, an expert with Ukrhazbank. 

According to Okhrymenko, the hryvnia was rising in the past rather than falling when such amounts of hryvnia remained in the correspondent accounts of banks. 

Okhrymenko said that the fall of the hryvnia in recent days was not backed by any economic indicators. 

"It is most likely that ... exporters are flat out refusing to sell dollars and are waiting for the price to go off the scale so that buyers will begin panic-buying of dollars," he added. 

Okhrymenko also said that he was not ruling out the possibility of the hryvnia rising to 8.70-8.80 UAH/USD after falling to 9 UAH/USD. 

He added that the hryvnia should rise to 8.00-8.50 UAH/USD if panic ended on the market because this was the real level based on the amounts of hryvnia remaining in banks' correspondent accounts and other indicators. 

Prominvestbank's First Deputy Board Chairman Viacheslav Utkin is also not ruling out the possibility of the hryvnia falling to 9 UAH/USD on the inter-bank currency market. 

"The hryvnia cannot return to its place under conditions of panic demand. All the hryvnia that goes into circulation as wages, payments, and other means is immediately converted into hard currency. Under such pressure, the exchange rate will rise. I think that the hryvnia will not exceed 9 UAH/USD..." Utkin said. 

At the same time, according to Utkin, the hryvnia should eventually return to its previous level because there are presently no serious factors that should cause the hryvnia to fall. 

Serhii Yaremenko, a former deputy chairman of the National Bank of Ukraine, is also not ruling out the possibility of the hryvnia devaluing further on the inter-bank currency market. 

"The process [of devaluation] will develop constantly, but there will be no sharp rises and falls of the hryvnia," Yaremenko said. 

According to Yaremenko, there are presently no coordinated actions by the government and the National Bank of Ukraine, and it is important for the process of devaluation of the hryvnia not to become uncontrolled. 

He said that banks could encounter a significant case of non-payments on foreign-currency loans when the hryvnia falls below 10 UAH/USD. 

As Ukrainian News earlier reported, the hryvnia fell by 13 kopecks to 8.65 UAH/USD on the inter-bank currency market on September 2.

Written by: Sashko Thursday, 03 September 2009 14:20