Flexible Currency Regime Coming Closer

February 2005 | Market Strategy

The case for floating the hryvnia is certainly strengthening. The National Bank of Ukraine is currently aiming to keep the annual average exchange rate between UAH5.2700/US$ and UAH5.3100/US$, against UAH5.2950/US$ at present. However, the pressures on the currency are firmly on the upside. The economic performance of the Ukraine - notwithstanding the brief problems caused by the elections in late 2004 - has been very robust, and has resulted in strong inflows into the economy. Real GDP growth came in at 12% last year, and the government is expecting the economy to grow by as much as 9% in 2005.

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