Strengthened hryvnia weakens agro-exports and boosts competition - 31.12.2019

The current ratio of hryvnia to US dollar weakens Ukrainian agricultural exports and thus strengthens competition in the international market.

"Today's exchange rate — 1 USD = 23 UAH — is very painful for exporters as Ukraine has an export-oriented economy. Our GDP is 60% dependent on what happens in foreign markets. That is, exports by the country are weakening and thus our competitors are strengthening," stressed Andriy Stetsevych, Deputy Chairman of the Management Board of Oschadbank.

According to him, all of Oschadbank's agrarian clients register risks. All are overstocked and trading less. He pointed out that now the agricultural producers argue it is critical for the agribusiness. It is impossible to enter the market with 28 UAH/USD, buying material and technical resources and sell at a rate of 23 UAH/USD.

"A mild, non-rigid inflation targeting is needed. And then, respectively, the market exchange rate adjustment," said Deputy Chairman of the Board of Oschadbank.

Previously reported that one of the main factors contributing to the Ukrainian hryvnia's appreciation during November-December 2019 was a record harvest of grains and oilseeds in Ukraine.