The Hryvnia Exchange Rate Drops Sharply: Three Main Reasons Named.

According to inkorr.com: This week, the Ukrainian Hryvnia is facing serious challenges that negatively affect its exchange rate. The main reasons for the problems include the start of the heating season, an increase in shelling from Russia, heightened demand for foreign currency among the population, and instability caused by the US government shutdown.

Financial analyst Oleksiy Kozyrev voiced the forecast concerning the currency market during his appearance on the YouTube channel Finance.ua.

Internal Pressure Factors

The analyst notes that several conflicting trends will affect the currency market of Ukraine, most of which will have a negative effect on the Hryvnia.

The main internal risks include:

• Intensification of attacks on infrastructure. The aggressive actions of the enemy complicate business operations and require significant costs for recovery, putting pressure on the Hryvnia.

• The start of the heating season. Energy and utility companies are facing rising costs for purchasing energy resources, which increases demand for foreign currency in the interbank market.

• Increased demand from the population. People are actively buying currency, leading to an increase in the negative balance between the volume of currency sold and purchased.

US Shutdown: External Factor

Among serious external threats is the partial government shutdown in the US, which has already begun. This creates uncertainty that negatively affects investor sentiment and global financial markets.

“This uncertainty in the US seriously impacts investor sentiment, and it affects the behavior of the euro/dollar pair and the price of gold,” the analyst notes.

The longer this process lasts, the more it will affect the stock market in America. The fluctuations of the euro exchange rate against the Hryvnia are immediately felt by Ukrainians.

Exchange Rate Forecast and the Role of the NBU

It is expected that the pressure on the Hryvnia will increase due to the combination of negative factors. The National Bank of Ukraine needs to actively intervene in the interbank market to balance exchange rate fluctuations and support the Hryvnia.

The forecast suggests that the exchange rate of the euro against the Hryvnia will fluctuate within 20-40 kopecks. The predicted exchange rate limits for next week are as follows:

• Cash Dollar: in banks - from 40.70 to 41.85 UAH, in exchange offices - from 41.00 to 41.80 UAH.

• Cash Euro: in banks - from 48.00 to 49.15 UAH, in exchange offices - from 48.10 to 49.05 UAH.

The expert predicts a deterioration in the Hryvnia exchange rate under the influence of various internal and external factors, such as shelling, the start of the heating season, and the US government shutdown. The National Bank of Ukraine will attempt to stabilize the situation in the currency market, supporting the Hryvnia under pressure.