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The widely expected devaluation of the hryvna could start as soon as this week, following the results of the parliamentary elections, warn analysts.

The currency is widely seen as overvalued, but the government has spent months propping it up ahead of the election. However, with the vote having been held on October 28, it is no longer obligated to hold back the pain for the population.

With 99% of the votes counted, analysts are speculating that the government could start to let the currency slide against the dollar. The hryvna is thought to be anywhere from 10% to 20% overvalued and could fall to UAH8.22 - UAH8.23 to the dollar, say analysts at Concorde Capital.

The interbank market has been suffering from a lack of liquidity in the last few weeks. There is also anecdotal evidence that some banks are already restricting withdrawals as the population starts to withdraw their savings and change them into dollars ahead of the expected devaluation.

Overnight interest rates on the interbank market stood at around 50-70% even for the top 20 banks, including those with foreign capital, according to reports. Analysts expect that the long-awaited refinancing of banks by the National Bank of Ukraine, a delay which has starved banks of cash to keep the exchange rate stable, could start this week, "which as a consequence will lead to the beginning of devaluation," says Concorde.

In addition, with the central bank taking into account the interests of exporters, as well as the state of its own reserves, it is now unlikely to be so active in terms of intervention, the anaysts suggest.