UAH: Sustained Appreciation Unlikely

The Ukrainian hryvnia has remained relatively stable since Q309, with the unit trading within a narrow band of UAH7.9510-8.1000/US$ since November. That the currency has not depreciated further throughout the economy's acute recession is primarily a reflection of both ongoing capital controls, in addition to sustained interventions on the foreign exchange market by the National Bank of Ukraine. Importantly, in the short term we do not expect the central bank to drastically alter its policy stance towards the unit, and expect the currency to remain within its aforementioned trading range through H1 accordingly.

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