IMF downgrades forecast for hryvnia rate in late 2015

The forecast is stipulated in the first review of the EFF program for Ukraine. According to the report, the national currency exchange rate will fall to UAH 24.9/$1 by the end of 2017, afterwards its devaluation will slow down to UAH 0.1-0.3 annually, which will bring the rate to UAH 25.5/$1 by late 2020. The original scenario of the EFF program approval in March this year suggested that the hryvnia to dollar exchange rate would reach UAH 22/$1 by the end of this year, UAH 22.7/$1 the next year, and UAH 23.4/$1 by late 2017, subsequently stabilizing, losing UAH 0.1 annually in the next three years. At the same time, the forecast for Ukraine's gross international reserves remained unchanged. As before, it is assumed that they will grow to $18.3 billion by the end of this year, next year - to $22.3 billion. Due to the worsened assessments of imports, according to IMF experts, these reserves will cover 3.7 and 4.2 months of imports respectively, whereas in March 2015 the figures corresponded to 3.3 and 3.7 months of imports. In 2017, 2018 and 2019, they are expected to increase to $28.5 billion, $35.2 billion and $38.4 billion respectively, corresponding to about 5.4 months of imports. The increase in reserves and debt restructuring will increase the coverage of short-term debt from 17.4% at the end of last year to 41.1% at the end of this year and 54% - by the end of next year, with stabilization at a level of about 75-80% in 2018-2020. The official hryvnia to U.S. dollar exchange rate for August 5 is UAH 21.714134 per $1. The international reserves of the NBU as of late June were equal to $10.264 billion.