Issue No. 2 – April 2026
Analysis of the current situation in Ukraine’s foreign exchange market
April was a month of relative stability for Ukraine’s foreign exchange market despite fairly high demand for the dollar; however, the National Bank of Ukraine’s regular participation in trading prevented significant fluctuations, which is why the second month of spring is ending with an exchange rate of 44.08 UAH per dollar.
However, further devaluation spikes may occur both against the backdrop of an unstable global environment and due to domestic imbalances, especially if the National Bank reduces its level of participation as a seller in the foreign exchange market. The trade balance is in deficit, and importers’ appetites can only be satisfied at the expense of the NBU’s reserves. As a reminder, last year Ukraine’s exports of goods amounted to $40.37 billion, while imports of goods totaled $84.74 billion. Consequently, the trade deficit reached $44.4 billion. Such an imbalance could have significantly impacted the exchange rate had it not been for the NBU’s interventions.
Global Context
The main focus in April was on the Fed, where a decision by the Committee on interest rates was expected; specifically, the Fed Committee meeting was scheduled for April 29. Earlier, at the March meeting, the Fed Committee left the benchmark rate unchanged in the range of 3.5% to 3.75%. Traders and investors did not expect any changes from the April meeting. Their forecasts came true, as the Fed left the benchmark interest rate unchanged for the third consecutive meeting, citing heightened economic uncertainty due to events in the Middle East among the reasons for the decision.
Overall, the main factors putting pressure on both exchange rate trajectories and the world’s major economies remain tensions in the Middle East, where the U.S. and Iran have yet to reach a peace agreement. As reported by the media, Iran has presented the U.S. with a new proposal to reopen the Strait of Hormuz and end the war. The new proposal, conveyed to the U.S. through Pakistani intermediaries, focuses on resolving the crisis surrounding the strait and the American blockade. Under this agreement, the ceasefire would be extended for an extended period, or the parties would agree to a complete end to the war. However, the nuclear negotiations so eagerly sought by the U.S. have been postponed in this proposal. There is currently no clear message from the White House regarding the consideration of Iran’s proposal, but it is already clear that there will be no quick peace in the Middle East. Meanwhile, U.S. Secretary of State Marco Rubio has stated that sanctions pressure on Iran could be intensified in the absence of an agreement.
In the oil market, the conflict in the Middle East is causing nothing but constant price volatility. This is influenced both by the very fact that the Strait of Hormuz is blocked and by other factors. For example, the U.S. president recently threatened Iran in a post on Truth Social, stating that the country “had better wise up quickly!” and accusing Tehran’s leadership of being unable to “get its act together.” This was reflected almost immediately in oil market prices. However, this was compounded by the UAE’s announcement of its withdrawal from OPEC. Fears of prolonged disruptions in the strategically vital Strait of Hormuz are driving oil prices higher: on April 29, Brent reached $114.50 per barrel, and on April 30, the price surpassed the $120 per barrel mark.
The dollar is also sensitive to the situation in the oil market and news regarding the conflict in the Middle East. As of the end of April, the DXY index shows that the U.S. currency has depreciated by 1.52% over the past month. However, the last week of April somewhat dampened panic sentiment, and the EUR/USD exchange rate stabilized at 1.1705, having stood at 1.1835 as recently as mid-month.
Domestic Ukrainian Context
Throughout April, the Ukrainian foreign exchange market, as in previous months, saw high demand for dollars and euros, with the National Bank of Ukraine remaining the market’s primary market maker. The NBU regularly intervened, which smoothed out peak demand surges and brought the exchange rate back within certain psychological limits. Between March 30 and April 24, the NBU sold $3.3 billion on the market. The average weekly value of interventions in April was $827 million. This is less than the average weekly value in March, which was over $1.1 billion. Thanks to the NBU’s regular participation in trading throughout April, the hryvnia managed to avoid significant exchange rate fluctuations, so as of the end of April, the official exchange rate stands at 44.08 UAH/USD, whereas the month began with a rate of 43.91 UAH/USD.
In the cash market in April, demand for dollars and euros was more subdued than in March. As a reminder, last month, cash currency purchases rose to $2.39 billion, and net cash currency purchases by the public amounted to $968 million. In April, there was a noticeable drop in both cash currency purchases and sales. According to the NBU, from April 1–27, purchases totaled $1.58 billion, while sales amounted to $1.24 billion. Thus, net cash currency purchases for this period stood at $337 million.
Regarding key macroeconomic factors, by the end of April it finally became clear that Ukraine would receive funds under the EU-approved €90 billion loan program. The first tranche is expected to arrive as early as May-June, amounting to €45 billion, which will be directed toward social budget support, the energy sector, and Ukraine’s defense needs. As for the IMF program, consultations are still ongoing. It is already clear that there are no plans to introduce VAT for sole proprietors this year, but the fund is counting on combating the shadow economy, meaning it insists on de-shadowing and fighting corruption. Media reports also indicate that among the methods for achieving the necessary de-shadowing, the Fund has cited legislative measures to cap minimum wage payments for certain professions if they are significantly below the market wage in the sector, as well as sanctions against large businesses that use fragmentation through a network of sole proprietorships. It is expected that in May, Ukraine and the IMF will reach a consensus in negotiations, which will provide greater confidence in further cooperation and the volume of credit support from the IMF in 2026–2027.
U.S. Dollar Exchange Rate: Trends and Analysis
In April, the hryvnia initially strengthened, but by the end of the month, the exchange rate nevertheless rose cautiously: while the NBU’s official rate stood at 43.91 UAH/USD at the beginning of the month, it reached 44.08 UAH/USD on April 30. Stable demand was observed on the interbank market, though there was no panic, and the NBU’s interventions satisfied all requests to buy currency. The interbank rate at the end of the month reached 43.98–44.05 UAH/USD.
In fact, we can say that it was a fairly stable month for the hryvnia, with conditions remaining quite calm both on the interbank market and in the cash segment. As of the end of April, the buying rate for cash dollars stood at 43.7–43.85 UAH/USD, while the selling rate was 44.00–44.10 UAH/USD.
Spreads between rates narrowed slightly throughout April—to 0.2–0.25 UAH/USD—which is a logical consequence of stability in the interbank market and the absence of panic demand in the cash market.
Key influencing factors:
· Stabilization of exchange rate fluctuations in April: the temporary strengthening of the hryvnia exchange rate, followed by a slight pullback toward devaluation, resulted from the absence of panic demand for foreign currency from both importers and the general public.
· Significant reduction in the NBU’s currency interventions: The National Bank remains the main seller in the currency market, but in April, dollar sales volumes declined, and exchange rate fluctuations became less pronounced.
· International factors: The dollar managed to strengthen slightly on the global market, but the currency remains at low levels and is at risk of further decline amid the conflict between the U.S. and Iran.
· Market expectations: Looking ahead, the depreciation trend in Ukraine is expected to continue, which enhances the dollar’s appeal as the primary currency for preserving savings.
Forecast
· Short term (1–2 weeks): base range of 44.05–44.20 UAH/USD, with possible fluctuations in either direction depending on demand and the volume of inflows from donor countries.
· Medium term (2–3 months): 44.15–44.65 UAH/USD. Currently, the dollar is not receiving support on the international market due to the prolonged conflict in the Middle East and the lack of a change in the key interest rate. However, the prospect of successful negotiations between the U.S. and Iran and the reopening of the Strait of Hormuz could significantly strengthen the U.S. currency’s position.
· Long term (6+ months): base scenario – devaluation of the hryvnia to 44.3–45.5 UAH/$. Ukraine’s national currency is under pressure from various factors, including the situation on the front lines, global oil prices, economic development, and the level of support Ukraine receives from its partners. The receipt of €45 billion from the EU offers hope that the government will be able to improve the budget deficit situation and replenish the NBU’s reserves, which could potentially support the hryvnia.
Euro exchange rate: trends and analysis
In April, the euro-to-hryvnia exchange rate rose due to the impact of exchange rate movements in the international market, where the euro strengthened and the US dollar weakened; consequently, this led to a deeper devaluation of the hryvnia against the euro than against the dollar. April began with the official euro exchange rate at 50.45 UAH/EUR, and as of April 30, the rate reached 51.58 UAH/EUR.
Since no increased demand for the euro was observed in Ukraine’s cash market during April, the exchange rate at currency exchange offices and bank teller windows moved smoothly and in sync with the NBU’s official rate.
Throughout April, the euro exchange rate at currency exchange offices and bank teller windows changed as follows: at the beginning of April, the buying rate was 50.0–50.7 UAH/EUR, and the selling rate was 51.0–51.2 UAH/EUR, while by the end of April, the buying rate reached 50.95–51.4 UAH/EUR. As for the euro selling rate, as of April 30, the cash market rate was within the range of 51.75–52.10 UAH/EUR.
Spreads between exchange rates initially widened in April due to uncertainty regarding further changes in the euro’s exchange rate on the global market, but by the end of April, amid declining demand for the euro on the domestic market, spreads narrowed to 0.4–0.6 UAH/EUR.
Key influencing factors:
· The euro is strengthening its position on the international market: the euro-dollar exchange rate rose in April; although the dollar strengthened somewhat toward the end of the month, the euro remains at 1.1705 USD/EUR.
· Investors are interested in the euro as a liquid and reliable asset: tensions between the U.S. and Iran are motivating investors to turn their attention to euro-denominated assets, and as long as the conflict in the Middle East remains unresolved, the euro’s strong position will persist.
· Demand for the euro in Ukraine is declining: there was no rush demand for the euro on the cash market in April, and the temporary strengthening of the hryvnia against the dollar allowed for a focus on buying it, while the euro, which had risen in price, was more attractive for selling transactions.
Forecast:
· Short term (2–4 weeks): if the euro continues to strengthen on the global market, it may remain within the 51.5–52.0 UAH/€ range on the Ukrainian market.
· Medium term (2–4 months): the euro may strengthen to 52.5 UAH/€. A drop in oil prices should the Strait of Hormuz be unblocked could provide support for the dollar, while the euro would lose ground.
· Long term (6+ months): if the U.S. and Iran enter into substantive negotiations within the next two months and the planned Fed rate cut is implemented, the euro exchange rate in Ukraine could range between 52.60–53.80 UAH/€.
Recommendations for businesses and investors
May could be a month of rapid exchange rate movements. Given the continued high risks for investors due to instability in the Middle East and the sharp rise in oil prices, currency strategy during this period of high risk should remain cautious and flexible, and account for multiple scenarios.
Global instability will determine the level of confidence in currencies. The main drivers of change are linked to a possible resolution of the conflict between the U.S. and Iran, which will influence the future trajectory of the dollar and the euro.
Fed rates may provide support for the dollar, but for how long? The EUR/USD pair will be influenced more by geopolitics than by Fed decisions. However, monitoring economic news from the U.S. is critically important for timely reactions and strategy adjustments.
Liquidity is at the heart of all strategies. The lack of stability and predictability heightens the role of liquid currencies, with the dollar and euro remaining the mainstays of the portfolio. If diversification is part of your personal financial plan, you can allocate a certain percentage to other currencies (for example, allocate 10% to Swiss francs).
Safe investments are part of every strategy. Even if an investor chooses to take risks to generate short-term speculative returns, a portion of funds should be allocated to risk-free savings, so purchasing cash currency will come in handy.
The national currency should be used in limited amounts for current expenses; for other plans, use the dollar. In a long-term balanced accumulation strategy, holdings in dollars should constitute at least 50% of the currency portfolio. Since the hryvnia may continue to depreciate to a level exceeding 45 UAH/USD, the role of protecting funds from devaluation through investments in the dollar is growing.
Focus on the oil market. It is important to analyze oil price movements for a possible partial strategy adjustment, as a significant drop in oil prices could provide strong support for the dollar, while the euro would lose ground. In a balanced currency portfolio, no more than 35% of savings should be in euros.
Monitor spreads to make quick profits. Since spreads are constantly changing, this gives investors the opportunity to make profitable conversions from euros to hryvnias at certain times, and then from hryvnias to dollars. However, one should be cautious about risky transactions and calculate potential losses.
The NBU’s discount rate may change. Inflation is rising in Ukraine, leading the regulator to a possible decision to raise the discount rate. For investors, this will mean the prospect of earning higher rates on hryvnia-denominated government bonds, as well as on bank deposits. However, it is risky to allocate all savings to hryvnia-denominated assets; it is better to focus on a well-thought-out currency strategy.
What’s important in the news. We are monitoring messages from the White House and Iranian officials, and regularly tracking oil price dynamics. A change in the Fed rate will signal increased investor attention to assets denominated in U.S. dollars. In the domestic market, indicators of exchange rate changes may include enemy attacks on energy infrastructure, as well as negotiations with the IMF and information regarding the receipt of loan tranches from the EU.
This material was prepared by analysts at KYT Group, an international multi-service product 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 liability for any consequences arising from the use of this information. All information is provided “as is,” without any additional warranties of completeness, obligations regarding timeliness, or updates or supplements.
Users of this material must independently assess risks and make informed decisions based on their own evaluation and analysis of the situation using various available sources that they themselves deem sufficiently qualified. Before making any investment decisions, we recommend consulting with an independent financial advisor.
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