Ukrainians double FCY purchases in August

The Ukrainian public purchased USD 105 mln in August compared to USD 58.9 mln in July and USD 40 mln in average monthly purchases in 1H16, according to central bank report of Sept. 6. Sales of foreign cash by the public exceeded purchases but were reported to have declined substantially. In particular, Ukrainians sold USD 236.9 mln in cash in August compared to USD 385.3 mln in the previous month and nearly USD 300 mln in average monthly sales in 1H16.

Alexander Paraschiy: Resumed hryvnia depreciation in August was the main reason for boosted foreign currency purchases by the public. Given that the current account deficit will be expanding with subsequent pressure on the hryvnia, we should expect maintained interest in foreign cash in the nearest future.

We cannot rule out hryvnia volatility causing resumed foreign currency outflow from the banking system. Still we do not see this trend as something dangerous and we still project a UAH 27/USD exchange rate by the year end.