The Ukrainian hryvnia, which has firmed 9% since the start of the year on an influx of foreign capital into local bonds, will slip soon due to an expected drop in foreign money inflows and a wide trade deficit, a Reuters poll showed on Thursday. Ukrainian analysts see the hryvnia averaging at 27.0 against $1 in three months and at 27.90 in six months compared to the current level of 25.42/$1.

"Strengthening is not the result of structural changes in the economy when we begin to export more and import less, or when we significantly change the investment climate, which attracts direct investments," said Serhiy Fursa, a Kiev-based investment banker from Dragon Capital.

It is the result of an influx of portfolio investors which "is not a stable trend, sooner or later it will end and the hryvnia will have to return to its usual state". The analysts forecast Ukraine's current account deficit at $4.1 billion in 2019 and $5.1 billion in 2020 compared to $4.3 billion in 2018, while its economic growth will slow to 2.9% this year and 3% next year after 3.3% last year.

Copyright Reuters, 2019