Dollar trading volume rises alongside the exchange rate

The foreign exchange market in Ukraine is once again experiencing turbulence. The hryvnia has been volatile for a month now. Appreciation of the national currency is followed by depreciation, and vice versa.

Meanwhile, a peculiar trend is observed in the market. If just recently, an increase in dollar sales volume was accompanied by a drop in its value, the situation is now completely the opposite.

What is happening in the market

For instance, in just 24 hours on 22 October, the trading volume in dollar equivalent increased by more than 105 million. And what does “обмін валют” (currency exchange) show? Instead of the expected strengthening of the hryvnia, the rate in banks unexpectedly rose.

On the morning of 24 October, “Obmena Lviv” offered to sell the dollar at a rate of 25.2. The buying rate was 24.8. Just a few days ago, the rate barely reached 25.

Meanwhile, the volume of transactions on the interbank foreign exchange market in September was much lower. The currency remained stable and even strengthened.

What to expect

It is not ruled out that such a situation is directly linked to speculation in the market. This would be the most favourable scenario. In that case, buying currency in Lviv will likely soon be possible at the previous price – 25 hryvnias per dollar. The same applies to other settlements in Ukraine.

However, one should not expect a rate of 8, which existed in Ukraine just five years ago. The currency rates in Lviv exchange offices are currently close to the real value. However, this is not very advantageous for business. This primarily concerns exporters, who would gladly sell their products at a rate of 30 or higher. In such a case, profits would be at least 20% higher.

Under the current circumstances, many are operating on the edge of profitability or even at a loss. Naturally, such a situation will lead to a decrease in tax payments. The hole in the budget will inevitably affect the exchange rate. As a result, currency exchange in Lviv may take place at a price of 28 hryvnias per dollar, or even more, as early as 2020.

Meanwhile, to purchase currency, it is recommended to reserve it in advance. Otherwise, the bank may simply not have the required amount, or the rate may change significantly by the time a person reaches the branch.

To avoid such problems, it is worth visiting a currency exchange office in Lviv, where one can reserve the amount and rate in advance for one hour on its website.