The NBU explained the weakening of the hryvnia in early November — what is happening in the foreign exchange market

The National Bank of Ukraine assures that the situation on the foreign exchange market remains under control, despite the temporary weakening of the hryvnia at the beginning of November due to increased budget spending and limited export supply. The NBU reports this, UNN reports.

In the first days of November, demand for foreign currency increased amid a significant rise in budget spending, particularly on the defense and security sectors. In addition, demand for foreign currency from individuals increased, as traditionally occurs at the beginning of the month, including against the backdrop of the renewal of monthly limits on currency purchases. At the same time, the supply of foreign currency was limited by large VAT refunds at the end of October, as well as Russian shelling, which led to a smaller seasonal increase in exports and, consequently, lower currency sales by the agricultural and metallurgical sectors. The supply of currency was partially supported by situational sales by individual companies, but these were not systematic. During periods when such sales declined, the hryvnia weakened against the US dollar 

The NBU said that the situation on the foreign exchange market remains under control. The dynamics of the official hryvnia exchange rate are determined by changes in the balance between demand for and supply of foreign currency on the market, as provided for by the managed exchange-rate flexibility regime.

The National Bank is closely monitoring the situation and is ready, if necessary, to take additional measures to ensure the stability of the foreign exchange market. The NBU responded to the widening gap between the official hryvnia exchange rate and the rate at which financial institutions sell foreign currency, which helped narrow it. First, the NBU held active consultations with the market regarding the reasons for this dynamic. Second, it decided to proactively conduct, on November 3, operations to exchange banks' non-cash currency for cash currency to replenish their cash desks 

The National Bank noted that these operations confirmed that there are no problems with the availability of cash foreign currency in the financial system. The US dollar supply announced as part of the relevant operations ($100 million) significantly exceeded actual demand from banks ($14 million), while the euro supply (€100 million) received no demand at all. The NBU fully satisfied banks' applications; therefore, there are no economic reasons for financial institutions to increase the gap between the official exchange rate and the rate at which they sell foreign currency.

Despite the absence of systemic problems with the physical availability of cash foreign currency in banks, the NBU plans to conduct such operations again on November 4. This preventive decision will, if necessary, support the cash foreign currency liquidity of the financial system at an appropriate level to meet the needs of Ukrainians. Maintaining the stability of the foreign exchange market remains an unchanged task of the NBU. The volume of international reserves is sufficient for this purpose— as of October 1, 2026, it amounted to $47.1 billion and increased by the end of October. For comparison, at the beginning of the full-scale invasion, international reserves amounted to less than $30 billion 

Let us recall 

The NBU raised its key rate to 16.5% due to inflation and pressure on the hryvnia. The ECB left rates unchanged amid energy risks.