Hryvnia holds steady: why the NBU is preventing a sharp fall and what will happen to the dollar

The National Bank of Ukraine continues the gradual weakening of the hryvnia without sharp fluctuations. Over the past week, the hryvnia depreciated from 41.73 to 41.99 UAH per dollar, meaning the national currency lost about 0.6% of its value. This indicates another stage of controlled devaluation, which the regulator is carrying out to adapt the economy to wartime conditions, UNN reports.

Hryvnia between "two fires": war, budget, and artificial stability

The Ukrainian currency is "between two fires": on the one hand, the state has a huge need for budget financing, which is growing under the influence of the war; on the other hand, excessive devaluation can shake confidence in the national currency and provoke panic among the population. That is why the National Bank of Ukraine has chosen a strategy of "managed flexibility", which allows avoiding sharp exchange rate jumps and at the same time gradually adapting the economy to new conditions.

Thus, according to NBU data, today the official dollar exchange rate is 41.9969 hryvnias, and the euro is 48.7668. The situation on the market differs somewhat: in banks, the dollar is traded within 41.70-42.19 UAH, and the euro within 48.45-49.17 UAH. On the interbank market, the rates are 42.06-42.09 hryvnias per dollar and 48.92-48.93 hryvnias per euro.

Why is the IMF calling for hryvnia devaluation?

The International Monetary Fund is calling on Ukraine for a deeper devaluation of the national currency. The IMF's logic is quite pragmatic: a weaker hryvnia increases revenues in hryvnia equivalent from exports, customs duties, and value-added tax, which helps cover military and social expenditures.

However, as fintech expert and co-founder of Concord Fintech Solutions Olena Sosedka explains, such a strategy has painful consequences for the domestic market.

The weakening of the hryvnia will instantly raise prices for fuel, medicines, equipment, and other imported goods. This will "eat away" at the real incomes of Ukrainians. Another consequence of deep devaluation could be an increase in the cost of servicing the national debt, which is tied to foreign currency. In addition, the weakening of the hryvnia could affect the trust of Ukrainians in the country's political leadership and cause a wave of panic among the population.

At the same time, the National Bank emphasizes that the regulator's goal is not to devalue the hryvnia for a short-term effect, but to ensure a balance between market expectations and price stability in the country.

"The NBU will continue to monitor the situation on the foreign exchange market and will remain a key player on it, compensating for the structural deficit of foreign currency. Thanks to this, the exchange rate will change in both directions (increase and decrease - ed.). At the same time, the NBU will significantly limit these fluctuations, preventing both a significant weakening of the hryvnia and a significant strengthening," the National Bank of Ukraine noted.

Hryvnia exchange rate forecast from Olena Sosedka

In addition to internal factors, the hryvnia exchange rate also depends on the global dynamics of currency markets. Changes in the euro/dollar ratio, decisions of the US Federal Reserve or the European Central Bank – all this has a direct impact on the Ukrainian currency market.

Today, the dollar remains stable thanks to global support from the US and the IMF, as well as the NBU's controlled currency policy within the country. The euro, however, remains more unpredictable.

"By the end of 2025, the dollar exchange rate may fluctuate in the range of 42.5 to 45.7 hryvnias. The euro, however, is likely to have a wider range of fluctuations – within 46.5 – 51.5 hryvnias, given the political uncertainty in the EU and changes in global energy markets," predicts Olena Sosedka.

Thus, the government's benchmarks and analysts' forecasts converge on one point: by the end of 2025, the key mark for the Ukrainian national currency will be the level of 45 hryvnias per dollar. It is important to note that this is not a critical limit, but rather a guideline that allows businesses and Ukrainians to calculate and plan their financial decisions.

"With stable external support and controlled inflation, the hryvnia has every chance to stay within this corridor. If, however, international aid receipts are delayed or new energy challenges arise, the exchange rate may temporarily rise above 46 hryvnias per dollar. At the same time, in a favorable scenario – restoration of exports, increased foreign currency receipts, and growth of reserves, even a strengthening of the hryvnia to the level of 41-42 per dollar is possible," Olena Sosedka stated.

Hryvnia not in crisis: devaluation as adaptation

The current weakening of the hryvnia should not be seen as a sign of crisis. It is rather a conscious process of adaptation to the realities of the wartime economy. And the main task of the NBU in the coming months is not only to maintain the exchange rate but also to preserve the trust of Ukrainians in the national currency. And it is this trust, backed by stable reserves and partner support, that will remain the main guarantee that the hryvnia will withstand any fluctuations in world markets and internal challenges.