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How Black Friday will affect currency rates: What will happen to the dollar?

How Black Friday will affect currency rates: What will happen to the dollar? How Black Friday will affect currency rates (Photo: Vitalii Nosach, RBC-Ukraine))

Sales in stores at the end of November will not significantly affect the dollar's exchange rate. However, Ukrainian expenditures will be higher during the Christmas holidays, which may impact the cash foreign exchange market, according to Taras Lesovyi, the head of the Treasury Department at Globus Bank, in a comment to RBC-Ukraine.

"The 'Black Friday' season is unlikely to significantly impact the currency market," he said.

According to him, firstly, the cash market exchange rates are formed concerning the interbank rate, adding a certain percentage (on average 1-1.5%) to the interbank rate.

Lesoviy reminded us that the non-cash market operates under a "managed flexibility" regime with frequent changes in current rates, depending on supply and demand. "However, the regulator takes timely measures to avoid any crisis phenomena. In other words, the cash market is not too detached from the interbank market," he added.

Secondly, the expert noted that "Black Friday" is not a significant example of a "crazy" surge in exchange transactions in the cash market.

"Unlike the pre-holiday periods, when usually some citizens may exchange some currency savings to prepare for the holiday (this mainly happens for Christmas, New Year, and Easter), Black Friday affects a small number of citizens who have the financial ability to buy something at a more advantageous price. How massive this phenomenon is remains a big question, especially during the war," Lesoviy said.

He suggested that on the Christmas holiday Eve, the cash market supply may remain relatively high (by 10-15%). Consequently, the difference between non-cash and cash rates may decrease (to 1.0-0.7%) for a certain period.

Black Friday

Black Friday is a traditional American event celebrated on the last Friday of November, the day after Thanksgiving. This day is one of the most significant and widespread annual discounts and sales days.

In many countries where Black Friday is observed, stores, retail networks, and online retail platforms offer significant discounts on goods and services. This can be an essential opportunity for consumers to get products at reduced prices before the start of Christmas shopping.

Black Friday originated in the United States and later spread to other countries. Initially, it was associated with the day when retail traders moved from "red figures" (financial losses) to "black figures" (profit) due to large sales volumes.

Ukrainians' attitude towards Black Friday

An online survey by Rakuten Viber showed that 66% of Ukrainians do not believe in Black Friday discounts and consider it a marketing move. Another 20% of respondents do not expect discounts, simply buying what and when they need it. 13% believe there are discounts on "Black Friday": 6.5% plan to hunt for discounts, while another 6.5% believe but do not plan to shop. Only 1% of Ukrainians have not heard of "Black Friday."

Responses to the question "If you postponed shopping in anticipation of 'Black Friday,' what do you plan to buy?" were distributed as follows:

  • I will not buy anything - 67%;
  • I don't know in advance, I will rely on discounts - 10%;
  • Clothing and footwear - 7%;
  • Home appliances - 4%;
  • Gadgets - 4%;
  • Cosmetics, personal care, vitamins - 3%;
  • Goods for the home and repairs - 2%;
  • Goods for pets - 2%;
  • Auto goods - 1%;
  • Subscriptions to useful services - less than 1%.