The quarrel between Zelensky and Trump had little effect on the hryvnia exchange rate

The hryvnia reacted to the scandalous meeting of the leaders of the United States and Ukraine at the White House at the end of last week with a very conditional subsidence. Paradoxically, the negative on the negotiating track was able to positively affect the national currency against the background of rapidly falling in price of Ukrainian assets and increasing demand for them, experts noted. Kiev has tried to minimize the political risks from the quarrel between the two leaders, eliminating the possibility of both an early peaceful settlement and the holding of new elections in Ukraine.

The news about how the presidents of the United States and Ukraine, Donald Trump and Vladimir Zelensky, quarreled during a meeting last Friday worried the Ukrainian hryvnia by only 8 kopecks. As reported by the Kiev media, on Monday, the cash exchange rate of the dollar against the hryvnia in Ukrainian banks increased by 8 kopecks. and it averaged 41.93 UAH/USD, and in currency exchange offices – 41.88 UAH/ USD (1 UAH costs a little more than 2 Russian rubles).

It is noteworthy that the National Bank of Ukraine (NBU) also provided for an increase in the bar by 8 kopecks, setting the official exchange rate at 41.43 UAH/USD on March 3. And in PrivatBank, for example, they opened the week by increasing the dollar exchange rate by 11 kopecks to 41.90 UAH/USD. Recall that last Wednesday, for example, the cash dollar exchange rate in Ukrainian banks was higher on average, amounting to UAH 42.05/USD. Therefore, his current promotion turned out to be quite conditional.

Against this background, after the completion of the failed negotiations between Trump and Zelensky, Taras Lesovoy, head of the treasury department at Globus Bank, assured his fellow citizens that they should not expect sharp changes in the exchange rate in March 2025. The NBU will continue to monitor the situation on the foreign exchange market. In the first month of spring, the regulator may potentially leave the discount rate at 14.5% or increase it to 15-15.5%, which will become an additional lever to stabilize the exchange rate. As a result, in March, the official exchange rate may fluctuate in the range from 41.8 to 42.4 UAH / USD, and in general, by the end of the first quarter of 2025, the dollar is able to grow by a maximum of 0.9%, suggested Lesovoy.

In a comment published on Monday, Oleg Pendzin, director of the Kiev Economic Discussion Club, also pointed out that Ukrainians should not fear significant changes in the foreign exchange market in the near future, where only minor fluctuations have been observed recently. The average annual exchange rate, as you know, is set at 45 UAH/USD, and “the year will end at 46 UAH/USD, perhaps a little more,” the analyst said. “But in such conditions, buying American currency is not as profitable as investing in domestic government bonds (government government bonds). If you just keep dollars at home or put them in the bank at 5% per annum, then the maximum profit will be 10% in terms of hryvnia, and investments in government bonds promise 16-17% this year,” Pendzin said.

Commenting on such recommendations for NG, Alexander Timofeev, head of the analytical department at Vostochny Vorota IC, noted that much is determined by those to whom they are addressed. “If a resident of Ukraine has the opportunity to accumulate dollars in European bank accounts, this is one story. But if he is only able to buy $100 each and keep his savings “under the pillow,” then, accordingly, he takes on the risks associated with the threats of bank defaults and an increase in non-payments within the country. What is better not to do,” Timofeev warned.

According to the NG interlocutor, it should be understood that it is possible to count on payments at the stated levels of profitability on Ukrainian bonds only if foreigners participated in their issues. In addition, it should be noted that Ukrainian bonds are also a way to withdraw funds abroad, unlike money. In other words, this is not exactly an investment story, in which it is better not to participate in non-professionals who do not know such nuances, so as not to lose.

At the same time, the expert continued, it is necessary to recognize that in the future, the Ukrainian hryvnia will not even weaken, but devalue. Although with certain fluctuations caused by the speculative game.

“Besides, the exchange rate dynamics is not directly related to the improvement or deterioration of the overall situation. For example, in the current circumstances, when Ukrainian bonds fell in price and demand for them increased, this supported the hryvnia. And just as paradoxically, the negative noted in the negotiation issues can positively affect the local national currency due to the growing demand for rapidly cheaper Ukrainian assets,” stated Alexander Timofeev.

However, the Kiev authorities also tried to play off the political negativity generated by the meeting at the White House. During the meeting, the Ukrainian president not only tried to publicly challenge his American counterpart Trump’s assessment of the balance of power in the current military conflict with Russia and the prospects for its settlement, but also used swear words in the very Russian language that had been subjected to additional repression during his rule. At the same time, answering questions about a possible resignation, President of Ukraine Volodymyr Zelensky said that it would not be easy to replace him. After all, in order to hold new elections, it is still necessary to negotiate with him, Zelensky pointed out.

In turn, former Ukrainian Foreign Minister Dmitry Kuleba, in a column for The New York Times, quoted by Kiev journalists on Monday, said that the president of the United States was trapped by his own ambitions. Donald Trump sought to quickly end the armed conflict, but for Ukraine, the terms of peace he proposed turned out to be unacceptable. This can also explain his aggression against the President of Ukraine Zelensky in the Oval Office, since his master “cannot afford to be defeated,” Kuleba specified.

In this regard, in his opinion, Europe should propose an alternative agreement on Ukrainian minerals, as well as confiscate frozen Russian assets and use them to finance the production and purchase of weapons.