Cabinet of Ministers issues currency exchange rate forecast for 2020

The exchange rate of Ukraine's national currency has recently fallen significantly against the dollar and the euro. Despite the absence of panic, it is not possible to purchase large amounts of foreign currency in banks. At the same time, financial institutions are eager to accept dollars and euros. What is happening? And what should Ukrainians expect in the coming year?

Prime Minister Oleksiy Honcharuk provided his forecast regarding the situation during a press conference.

Cabinet of Ministers forecast

So, the Cabinet of Ministers of Ukraine has factored an exchange rate of around 27 hryvnia per dollar into its forecast. However, Honcharuk noted that if the country's economy shows decent growth, the rate would be set at 24.8 hryvnia per dollar.

In other words, it is at this price that “Obmenka Chernivtsi” (Obmenka Chernivtsi) will sell foreign currency. At least, that is how it should be. It is important to understand, however, that the rate may be artificially maintained. In such a case, the situation on the black market would be entirely different.

Currency exchange rates in Chernivtsi and other Ukrainian cities may differ significantly from the official rate. Moreover, it will be virtually impossible to purchase dollars and euros at banks.

In such a situation, it is recommended to monitor the black market currency exchange rates in Chernivtsi. This can be done using special websites. Such web resources allow users to book not only a specific amount but also the exchange rate for 60 minutes. In other words, during this period, foreign currency can be purchased at the agreed rate regardless of market conditions.

However, this is the worst-case scenario. For now, according to the Cabinet of Ministers' forecast, the hryvnia may strengthen to the 23.9 mark in 2021. The expected rate for 2022 is 24.2 hryvnia per dollar.

How realistic the Cabinet of Ministers' scenario is, and whether currency exchange in Chernivtsi will indeed take place at such a rate, remains to be seen. In this case, everything depends on the speed and effectiveness of reforms in Ukraine.

For now, currency exchange rates in Chernivtsi today show a completely different dynamic.

The National Bank of Ukraine also expects economic growth. The financial institution announced a reduction in the policy rate from 25.10.2019. This will inevitably affect the profitability of the banking system.