Due to foreign exchange inflow from exports and the renewed interest from foreign portfolio investors in Ukrainian bonds, the hryvnia is likely to strengthen in the first half of 2021. This is stated in the results of the experts’ monthly survey conducted by Reuters.
According to a median forecast of 13 analysts, the hryvnia exchange rate by June will be 27.60 per $1.
OTP Bank Ukraine estimates the rate at 26.50 UAH for a six-month period. First of all, this is due to the situation in foreign commodity markets, including rising prices for grain and steel, and as a consequence of increasing foreign exchange earnings.
Grain and steel accounted for more than 35% of Ukrainian goods exports last year.
"In addition, there are positive expectations for cooperation with the IMF," said Oleksandr Podnebenniy from OTP Bank Ukraine.
Analysts from Raiffeisen Bank Aval expect Kyiv to receive the next IMF loan in the Q1. "The ongoing review of the current programme with the IMF is a kind of a quality mark that is transparent and understandable to foreign investors and will allow, inter alia, to improve the balance of payments," they think.
Foreigners’ sentiment toward Ukrainian debt began improving in late December after the IMF loan talks resumed.
In 2020, foreign investors reduced their local bond portfolio by almost $2 billion, or 42%, as Ukraine fell into recession because of the coronavirus pandemic. But foreign investors have bought 10.3 billion UAH ($368 million) of government bonds since mid-December.
"Rates are gradually rising and global interest in risky assets is growing amid expectations of growth resumption in the global economy in 2021," Serhii Kolodii from Raiffeisen Bank Aval thinks.