Issue No. 1 – February 2026
The purpose of this review is to provide an analysis of the current situation on the Ukrainian currency market and a forecast of the hryvnia exchange rate against key currencies based on current data. We consider the current conditions, market dynamics, key influencing factors, and likely scenarios.
Analysis of the current situation on the currency market
International context
After the Fed left its key rate unchanged at the end of January, the number of forecasts for the rate to remain at its current level for the next few months increased in the US. The Bureau of Labor Statistics reported that non-farm payrolls in the US rose by 130,000 in January, while the unemployment rate fell from 4.4% to 4.3%. This indicates that interest rates are likely to remain unchanged, because if the labor market is improving, there are no fears of a market slowdown, which was a significant reason for the Fed to cut rates last year.
Recall that at the end of January, the Fed Committee left the central bank’s base interest rate in the range of 3.50-3.75% after lowering it at each of the last three meetings in 2025. Moreover, the higher-than-expected job growth in January may give the Fed confidence that the labor market is stabilizing and motivate the central bank to focus on controlling inflation, which remains above the Fed’s 2% target. The US consumer price index rose 0.3% month-on-month and 2.7% year-on-year in December last year, which is stable compared to November 2025.
As for the economy, US GDP grew by 4.4% year-on-year in the third quarter, and this pace is expected to slow slightly during 2026, but still exceed 2%. Some economists believe that the next Fed rate cut is unlikely before mid-June 2026. However, everything will depend on labor market indicators and inflation rates in the US. Interestingly, according to media reports, in his five speeches on the economy since December, Donald Trump has claimed that inflation has been overcome and prices have fallen almost 30 times, which, of course, contradicts the actual economic data.
As for the EUR/USD pair, during the first half of February, the dollar managed to strengthen slightly compared to January, reaching 1.1874. This was facilitated by both the Fed’s decision to leave the rate unchanged and the optimistic US labor market indicators and investors’ hopes that inflation would not exceed the forecast for this year. However, there is no certainty about the Fed’s future policy, and some analysts have already suggested that the Fed may start cutting rates more aggressively, causing the dollar to fall by 10% during 2026. Among the risk factors that will affect the dollar is the change in the Fed’s leadership, as many believe that the successor to current Chairman Jerome Powell will face pressure from President Donald Trump to lower borrowing costs, leading to several rate cuts in 2026.
Meanwhile, in Europe, the ECB is keeping key rates unchanged, and most economists say the central bank will stick to this policy throughout 2026. The fact is that inflation in the eurozone is considered to be under control, although there are risks of a decline amid the strengthening of the euro. With interest rates already low at 2% and inflation hovering around the ECB’s 2% target, the ECB is in no hurry to change its monetary policy. The strong euro is not particularly pleasing to Europeans, as it makes imports cheaper for buyers in the eurozone, which affects inflation, and further strengthening of the euro could potentially require changes in rates. However, the EU is currently stable, and the economy is performing even better than expected: GDP in the fourth quarter of 2025 grew by 0.3% compared to the previous quarter, exceeding Bloomberg’s consensus forecast by 0.2%.
Internal Ukrainian context
In the first half of February, there was no stress on the Ukrainian currency market, and the hryvnia depreciated insignificantly against the US dollar: at the beginning of the month, the official exchange rate was 42.84 UAH/USD, and at the end of the second week of February, it was 43.03 UAH/USD. The slow fluctuation was traditionally facilitated by NBU interventions: since the beginning of January, according to official NBU data, the regulator has injected more than $4.33 billion into the market.
Inflation rates in Ukraine are declining. The NBU forecasts that inflation will be 7.5% at the end of 2026 and will remain close to the 5% target in the future, reaching it in 2028. The economy will grow by 1.8% in 2026, and in the following years, the recovery will accelerate to 3-4% per year. National Bank experts believe that inflation will decline in the coming months, primarily due to the residual effects of crop growth in 2025. At the same time, the consequences of large-scale destruction in the energy sector will put pressure on prices through both market and administrative mechanisms.
The NBU’s Inflation Report for January 2026 states that international aid will be sufficient to finance the budget deficit without resorting to debt issuance. The NBU has left its assumption regarding the budget deficit in 2026 unchanged at around 19% of GDP, which is in line with the State Budget Law. The NBU assumes that Ukraine will receive $51.4 billion from international partners in 2026, $42.7 billion in 2027, and $21.6 billion in 2028. This will allow international reserves to be maintained at a sufficient level to support the stability of the currency market. The main hopes for supporting the state budget this year are linked to the EU Council’s decision to allocate €90 billion to Ukraine in 2026 and 2027, as well as the current ERA Loans mechanism.
As of early February, Ukraine’s international reserves had grown to $57.66 billion. According to the National Bank, in January, they increased by $357.8 million compared to December, primarily due to external financing, which offset the National Bank’s net currency sales and the country’s debt payments in foreign currency. The current volume of international reserves provides financing for six months of future imports.
US dollar exchange rate: dynamics and analysis
General characteristics of market behavior
During the first half of February, the US dollar strengthened on the Ukrainian currency market. At the beginning of the month, the interbank exchange rate was at 42.9 UAH/USD, and on February 12, it was already at 43.05 UAH/USD.
On the cash market, there were slight devaluation fluctuations between February 1 and 13, and the purchase rate in mid-February reached a range of 42.59–42.85 UAH/USD, while the sale rate remained within 43.15–43.4 UAH/USD. Meanwhile, at bank cash desks and exchange offices, the spread between the buying and selling rates changed only slightly compared to January, amounting to 0.5–0.6 UAH/USD.
Key influencing factors
· International context. The dollar began to strengthen against the euro due to growing investor optimism about inflation and the apparent trend toward improvement in the labor market, which promises predictable Fed policy and no sharp changes in rates in the near future.
· International reserves are at a high level: as of early February 2026, they reached USD 57.66 billion.
· The National Bank supports the currency market with regular interventions: the interbank exchange rate is gradually weakening without any sharp movements, and since the beginning of the year, the NBU has injected more than $4.33 billion into the market.
Forecast
· Short term (1–2 weeks): base range of 43.3–43.8 UAH/USD with possible fluctuations towards a weaker hryvnia.
· Medium term (2–3 months): 43.50–44.60 UAH/USD. The dollar is expected to gradually strengthen on the international market due to the stabilization of the labor market and decent macroeconomic data, as well as the absence of sharp changes in the Fed’s policy on the base rate. In Ukraine, the hryvnia exchange rate will be influenced by the level of demand for currency on the interbank market, which may increase in February–March, in particular due to another series of massive enemy attacks on energy facilities, which will lead to the need to purchase expensive imported equipment. The exchange rate will also be influenced by the situation on the front lines and political statements and forecasts regarding the possible end of the full-scale war.
· Long term (6+ months): a gradual devaluation of the hryvnia against the dollar is expected, as well as regular and large-scale support for the market through currency interventions by the NBU. The benchmark for the first half of 2026 is 43.5–44.95 UAH/$.
Euro exchange rate: dynamics and analysis
General characteristics of market behavior
During the first half of February, the euro fluctuated on the Ukrainian market: initially, the hryvnia strengthened against the euro, and the official euro exchange rate at the beginning of February was 51.24 UAH/EUR, and five days later it was already 50.89 UAH/EUR. However, in the middle of the month, the euro began to strengthen and reached 51.20 UAH/EUR. In the cash segment, the euro also fell in January. While at the beginning of February, the euro purchase rate in banks and exchange offices was 51 UAH/EUR, and the sale rate was 51.95 UAH/EUR, in mid-February, the purchase rate was 50.8 UAH/EUR, and the sale rate was 51.45 UAH/EUR.
Key observations
· Exchange rate geometry: The selling rate for cash euros in mid-February 2026 is at the level of 51.29–51.50 UAH/EUR.
The dynamics of the euro exchange rate were influenced by the strengthening of the dollar on the international market, as well as the narrowing of the spread between the buying and selling rates to 0.2–0.4 UAH/EUR.
· Supply and demand: Demand for the euro fell slightly on the interbank market in February 2026, and demand for the euro also declined on the cash market in Ukraine. Between February 10 and 12 alone, the euro exchange rate on the interbank market fell from 51.37 UAH/EUR to 51.03 UAH/EUR.
Key influencing factors
· Global context: The euro is falling against the US dollar, which is strengthening in February amid optimistic forecasts for the development of the US economy.
· Domestic market: the euro continues to follow the dollar in the direction of strengthening, but the pace of the euro’s strengthening is currently quite limited, which is explained, in particular, by the relatively low level of demand.
· Behavioral factor: in Ukraine, there is no rush demand for the euro in mid-February, and spreads between exchange rates are steadily narrowing. However, everything may change if the recent massive shelling of energy infrastructure leads to an increase in the need to purchase equipment in the EU for euros, which will play on the growth in demand and, accordingly, lead to new exchange rate jumps.
Forecast
· Short term (1–2 weeks): the euro on the interbank market will remain in the range of 51.2–51.8 UAH/€ with a tendency to move towards the upper limit.
· Medium term (2–3 months): no significant strengthening of the dollar is expected on the international market, so the euro will remain strong. In Ukraine, the euro exchange rate will be influenced by demand for the euro due to the need to import from the EU, but relatively low demand on the cash market will not allow the euro exchange rate to deviate significantly from the interbank market.
The exchange rate benchmark is 51.6–54.5 UAH/EUR.
· Long term (6+ months): the euro may rise to 54.8–56.5 UAH/EUR in the first half of 2026.
Recommendations: dollar or euro — buy, sell, or wait?
USD/UAH
The dollar is strengthening on the international market thanks to optimistic expectations and updated data on the labor market and inflation, which showed stable development of the US economy and a reduction in risks. However, “black swans” in the form of a change in the Fed’s leadership and further pressure from Donald Trump on the central bank to implement a significant reduction in rates during 2026 cannot be ruled out.
Overall, the dollar looks quite vulnerable, given the unpredictability of President Trump’s policies and possible new tariff surprises from the US. However, positive sentiment prevails for now, which is reflected in the value of defensive assets.
In Ukraine, the hryvnia is under strong pressure from increased demand for foreign currency, and economic risks associated with the war, destroyed energy infrastructure, and the lack of even partial predictability of further developments in the hostilities do not give the national currency much room for strengthening. Building up savings in dollars will remain the basis for investors throughout 2026 as part of both medium- and long-term strategies. The expected weakening of the hryvnia exchange rate only adds to the appeal of accumulating dollars. Speculative income can be obtained both from fluctuations in the hryvnia against the dollar and from frequent and irregular fluctuations in the euro exchange rate.
EUR/UAH
The euro has been losing ground in recent weeks, but this is not a signal to exit euro savings, as the main forecasts for 2026 are still linked to the strengthening of the euro, although significant fluctuations cannot be ruled out. It is precisely these fluctuations that will allow investors to profitably enter into investments in euros and also exit them with a profit, especially when it comes to a medium-term strategy. The liquidity of the euro will remain high thanks to the stable development of the eurozone economy and the ECB’s predictable conservative strategy.
Overall strategy
The Federal Reserve is not currently planning any changes to the base rate, which was left unchanged at the last meeting at the end of January.
Optimistic sentiments about the active development of the US economy are motivating investors to return to dollar assets, and the dollar’s exchange rate against the euro is gradually strengthening. However, the temporary stability is fragile, and further fluctuations in the other direction are possible in the near future. Unlike the US, the EU economy is moving slowly but surely towards growth, and inflation in the eurozone is more controlled and predictable. All this gives reason to expect uneven and multidirectional fluctuations in the dollar exchange rate in the coming months.
Ukraine has accumulated a large amount of international reserves, sufficient for six months of imports, and has planned amounts of aid from partner countries, which are positive factors that may somewhat curb the devaluation trend. However, in the long term, the hryvnia will weaken in 2026 due to the ongoing war of attrition, problems with the state budget deficit, and negative investor expectations regarding the economic situation. Nevertheless, the pace of devaluation will be controlled by the NBU, which will remain the main player in the currency market. The NBU will carry out currency interventions to the extent necessary to meet demand and prevent sharp fluctuations in the exchange rate. In this situation, investors should focus on their own currency strategies, planning to buy dollars and euros in a timely manner, which will be the base currencies of their portfolios and will allow them to carry out profitable currency exchange transactions at any convenient time.
This material has been prepared by analysts at KYT Group, an international multi-service FinTech platform, and reflects their expert, analytical, and professional judgment. The information presented in this review is for informational purposes only and should not be construed as a recommendation for action.
The company and its analysts make no representations and assume no responsibility for any consequences arising from the use of this information. All information is provided “as is” without any additional guarantees of completeness, obligations of timeliness or updating or supplementation.
Users of this material should independently assess the risks and make informed decisions based on their own assessment and analysis of the situation from various available sources that they themselves consider sufficiently qualified. Before making any investment decisions, we recommend consulting with an independent financial advisor.
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