As of now, the Chinese stock market is continuing its downward trend, with the Shanghai Composite plummeting by 8,4%. The stock market contraction in China is causing panic and forcing Chinese companies to gradually stiffen requirements to closing deals.
The stock market crash in China is attributed to the contraction of the Chinese economy and projected increase in interest rates in the US. Major investors reviewing their portfolios and capital outflow are also cited as possible reasons for the stock market collapse.
Will the Chinese stock market crash have an impact on Ukraine? How can it affect the Hryvna exchange rate?
This is what Alexey Martunyuk, an analyst with xDirect company, had to say in this respect:
“The Hryvna exchange rate is more affected by what’s going on in Donbas now. Unlike the Ruble, the Hryvna exchange rate isn’t pegged to an oil price. On the other hand, we will not benefit from the turmoil in the Chinese stock market so long as it is causing prices for oil and ferrous metals and iron ore to go down. And this is what constitutes the bulk of our export earnings and affects the Hryvna exchange rate. One should keep in mind that making projections is pretty tough in Ukraine. A lot of things are happening contrary to common sense here. For example, oil prices are dropping while petrol prices are remaining unchanged or even increasing. As regards exchange rate projections, I believe that the US dollar will be worth UAH 25 by late September – early October. By the way, the exchange rate coincides with the one projected by the government in the next year’s budget”.