Dollar vs. Euro

How recent Dollar vs. Euro fall in exchange impacts software outsourcing industry in Ukraine.

Ukrainian National Bank continues its politics when local currency Hrivna is bound to US dollar with a fixed rate 5.05 UAH per 1 USD. That results that Hrivna falls in exchange to Euro together with US dollar.

IT outsourcing companies in Ukraine are divided into two major groups:
1) - selling services at USD prices and 2) - selling at EUR prices.

1 - As far as a major part of the service price is IT personnel salary and office rent, normally paid in Dollars or Hrivna, there is no price change because Hrivna remains fixed to Dollar.

2 - That group of companies starts receiving additional approximately 5.5% profit due to the fact that although they sell at Euro prices, they pay Dollar or Hrivna salaries and office rent (it's true for absolute majority).

Summarizing the above we conclude that those companies having EUR profits but buying IT services in Ukraine at USD prices, save approximately 4.4% on recent USD vs. EUR fall in exchange and there is no significant impact for the rest.