UAH/PLN: The pair rises for a second day despite the invasion of Russia
- The Ukrainian hryvnia (UAH) strengthens
- The Central Bank of Ukraine applies measures to support the currency
- Polish Zloty (PLN) falls against EUR, USD and GBP
- Polish GDP up 7.3% in the fourth quarter
The exchange rate of the Ukrainian hryvnia and the Polish zloty (UAH/PLN) is up on Tuesday building on the gains of the previous session. The pair settled up +1.95% yesterday at 0.1394 in the middle of the daily traded range. As of 14:30 UTC, UAH/PLN is trading up +1.2% at 0.1412.
Today, the pair is pushing higher as it extends its recovery from the 2022 low, a level that was last seen in June of last year. Ukraine’s national currency is showing resilience even as the conflict in Ukraine escalates.
So far, the Russian attack has failed to take Kiev. However, the Russian Defense Minister said the forces will continue to attack until Russia achieves its objective. Today, Russia stepped up its war efforts, with Putin ordering Russian forces, including nuclear weapons, to be on high alert.
Ukraine’s central bank limited withdrawals and imposed restrictions and temporary measures, halting the currency market, after the country declared martial law when Russian troops entered the country.
The Polish zloty is trading lower against the hryvnia and other major currencies such as the euro, pound and US dollar. It aligns with other Eastern European currencies. Close ties with Ukraine, both for trade and tourism, weigh on the demand for the currency.
Even bullish data was not able to help the Zloty this week. Data yesterday revealed that Poland’s economy saw broad-based growth in the last three months of last year and started 2022 on an optimistic tone. Fourth-quarter GDP was 7.3% year-on-year. Household consumption increased by 7.9%
However, the military conflict in Ukraine is expected to weigh on growth prospects in the coming months.
The huge level of uncertainty that accompanied Russia’s invasion is likely to hurt business confidence, while sanctions against Russia are also likely to hurt trade.