UAH: Depreciation Still On The Cards

Having lost over 60% of its value since the fourth quarter of 2008 and testing record lows near UAH9.2000/US$ in late February, the Ukrainian hryvnia has since stabilised markedly. Trading at an average UAH7.9785/US$ since the beginning of March, we believe the National Bank of Ukraine (NBU) has proved reasonably effective in arresting the currency's steep decline. Going forward, we believe the NBU's ongoing policy interventions in the foreign exchange market will keep the hryvnia trading in the UAH7.8000/US$ area through the short term.

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