Issue #2 – June 2025
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 the latest data. We analyze current conditions, market dynamics, key influencing factors, and likely scenarios.
Analysis of the current situation on the Ukrainian currency market
Ukraine’s foreign exchange market is entering the second half of the year amid relative stability in the domestic market and growing turbulence in the external market.
The current dynamics of the foreign exchange market is shaped by both external and internal factors that have the potential to change the exchange rate trajectory in the near future. The main topics of late June were the global weakness of the dollar, the emergence of new areas of tension on the global map, and the domestic agenda included the activation of the cash market in Ukraine and cautious currency liberalization, which continues under the control of the NBU.
Global context
Global markets are showing a strengthening of the euro amid a weakening dollar. The DXY index has reached its lowest level since 2022 – the US currency has lost more than 10% since the beginning of the year, and this drop could be the largest since the 1970s. The main trigger is political uncertainty in the United States. Rumors about Donald Trump’s intentions to replace the Fed chairman ahead of schedule and interfere with the institution’s activities have raised doubts about the independence of US monetary policy. Against this backdrop, the euro strengthened to USD 1.173, its highest level in three years, while the franc and yen also gained ground.
Although the Fed has so far refrained from changing rates, market expectations have already shifted and, accordingly, are being incorporated by market operators into exchange rate modeling and forecasting – the consensus expectation of international analysts regarding the likelihood of a rate cut at the next meeting has reached 25%.
At the same time, the ECB’s rhetoric remains cautious: the eurozone does not have enough institutional stability to challenge the dollar as the world’s reserve currency. The euro is growing mainly technically, due to the weakening of the dollar, rather than due to fundamental advantages, and strengthening its position is unfavorable for the European Union itself as an additional factor of pressure on exports.
Domestic Ukrainian context
The situation on the Ukrainian market is somewhat different. The cash segment is showing a sharp increase in demand: in May, banks brought $778 million of cash into Ukraine, which is 38% more than in April. In particular, the dollar amounted to $457 million (+52%) and the euro to $318 million (+22%). This indicates an increase in retail purchases, presumably by households that are either trying to lock in current exchange rate levels or increase savings in foreign currency amid seasonal growth in income and remittances, as well as increased devaluation expectations.
The charts show a widening of the spread between the euro buying and selling rates, which accompanies the growth of cash in the market. This signal is an indicator of nervousness in exchange offices and uncertainty about further exchange rate movements. The selling rate reacted more sensitively to the NBU’s exchange rate hike, while the buying rate grew more smoothly, indicating an imbalance in the supply/demand structure.
The National Bank of Ukraine maintains an active stance. Currency liberalization continues, but in a targeted manner, based on the principle of “new money – new conditions.” The NBU is not ready to completely lift restrictions and publicly recognizes that the risks of currency outflows are too high, which could upset the market balance.
The NBU’s readiness to ease restrictions or announcements of such actions could be a clear indicator that the ruling economic bloc has a fundamental vision of how to ensure a long-term balance in the domestic FX market, given the confirmation of further assistance from partners.
The government will soon declare its expectations for the average annual dollar exchange rate as part of the 2026 budget process.
Thus, the domestic FX market is entering a phase of searching for a new balance between controlled stability and growing external and internal risks.
US dollar exchange rate: dynamics and analysis
In June, the USD/UAH exchange rate remained generally stable with a moderate upward trend at the end of the month. Over the course of 30 days, the average purchase rate in banks increased from UAH 41.20 to UAH 41.42 per dollar, and the sale rate from UAH 41.70 to UAH 41.95 per dollar. The official NBU exchange rate rose from 41.52 to 41.69 UAH/$ over the same period.
In the shorter term, over the last week, the market showed stabilization after peaking in mid-June: the buying rate decreased from UAH 41.60-41.40/$, the selling rate was at UAH 42.15-41.95/$, and the official rate remained in the range of UAH 41.83-41.64/$. Thus, there were no sharp fluctuations and the exchange rate dynamics remained controlled.
The dynamics of spreads between buying, selling, and the official exchange rate shows that banks do not expect significant changes in the market and do not include additional premiums or risks in the exchange rate. This indicates a balance of demand for the dollar, stability in market behavior, and the absence of panic or speculative sentiment.
Key influencing factors:
Forecast:
Euro exchange rate: dynamics and analysis
In June, the euro demonstrated steady growth with minimal deviations, strengthening its position amid a weakening US dollar on global markets and continued strong demand for the euro in Ukraine. Over the past 30 days, there has been a gradual but steady increase in all key benchmarks: the average bid rate rose from ~46.80 to ~48.60 UAH/€, the ask rate from ~47.50 to almost 49.40 UAH/€, and the official NBU rate from ~46.90 to 48.48 UAH/€. The last week of June showed a certain acceleration of these dynamics.
These changes indicate a strong upward trend in the euro amid a weakening dollar, speculative interest, and a gradual recovery in import activity.
Key influencing factors:
Forecast:
In general, the euro market in Ukraine is showing a trend of active growth amid both global factors and domestic demand. The single currency is currently showing significantly higher volatility and market dynamics than the dollar.
Recommendations for businesses and investors
July will bring controlled stability to the dollar and strong growth to the euro. All of this is against the backdrop of a global tug-of-war between the dollar and the euro. In such an environment, the currency strategy should remain flexible, adaptable and designed for several different scenarios.
Liquidity is paramount. All foreign currency assets should be held in instruments with the ability to respond quickly. Time deposits, bonds without the possibility of early withdrawal, or pegging to one currency are potential traps. In the coming months, the focus should not be on yield, but on maintaining the ability to maneuver quickly.
Euro – growth has gained market momentum. After a significant rise in June, the market is still in the phase of appetite for the euro, and although some of the news has already been taken into account, volatility remains. If you need to reformat the share of this currency in your portfolio, it is best to do so gradually, when spreads narrow or pressure from global drivers decreases.
The dollar is still an important element of protection. The current stability does not mean that the dollar has lost its functions and appeal. On the contrary, it is worth keeping in your portfolio in the medium to long term: a devaluation trend for the hryvnia is likely in the fall or winter, which will reward patient dollar holders with strong nerves.
Spreads are the main marker for decisions. While spreads remain stable on the USD/UAH pair, they are widening again on the EUR/UAH pair. This indicates the return of nervousness and uncertainty: when operators put additional margin into the rate, it is a signal to take your time. When the spread is narrowing, it is time to analyze entry.
Fixed “currency benchmarks” are forbidden. The exchange rate predictability of recent weeks is not a basis for patterned actions or excessive optimism. Continue to work with 3-4 exchange rate scenarios and test how your asset structure will work in each of them.
Hryvnia – do not hold more than you need. It is still stable, but external imbalances are growing. Excessive accumulation of hryvnia funds creates risks. The hryvnia mass in excess of the operating reserve should be transferred to any of the reliable currencies or instruments linked to them.
Currency liberalization is more of a signal than an instruction to act. The NBU’s signals about easing restrictions are important, but so far they are more of a symbolic step. The real effect will be seen closer to the fall. Investors and businesses should not only follow the liberalization steps, but also keep in mind the possibility of the regulator’s reverse actions if the exchange rate scenario forces it to return to restrictions. You may want to consider investing in currency instruments that are least dependent on government actions, such as cash or stablecoins based on reliable currencies.
Keep your focus on the euro. If your business model involves expenses or revenues in euros, you should review the structure of currency risk, build a safety margin into contracts or test possible scenarios for a breakout above 50 UAH/€.
What is important in the news. First of all, the publication of indicators and exchange rate targets of the government and the NBU for 2026 as part of the budget process.
This material was prepared by the company’s analysts and reflects their expert, analytical professional judgment. The information provided 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 guarantees of completeness, obligations of timeliness or updates or additions.
Users of this material should make their own risk assessments and informed decisions based on their own evaluation and analysis of the situation from various available sources that they consider to be sufficiently qualified. We recommend that you consult an independent financial advisor before making any investment decisions.
REFERENCE
KYT Group is an international multi-service product FinTech company that has been successfully operating in the non-banking financial services market for 16 years. One of the company’s flagship activities is currency exchange. KYT Group is one of the largest operators in this segment of the Ukrainian financial market, is among the largest taxpayers, and is one of the industry leaders in terms of asset growth and equity.
More than 90 branches in 16 major cities of Ukraine are located in convenient locations for customers and have modern equipment for the convenience, security and confidentiality of each transaction.
The company’s activities comply with the regulatory requirements of the NBU. KYT Group adheres to EU standards, having a branch in Poland and planning cross-border expansion to European countries.
Please find below the current tenders of PJSC Ukrnafta announced in June 2025:
Overhaul of the oil collector “GZU-+++-GZU-+++” +++ of the Centralized Oil and Gas Processing Division “Okhtyrka Petroleum Gas” of PJSC Ukrnafta in Okhtyrka district, Sumy region.
Expected value of the procurement: UAH 11.00 million excluding VAT
Deadline for submission of bids: July 14, 2025.
Details are available at the link.
***
CNC turning center.
Expected value of the procurement: UAH 9.98 million excluding VAT
Deadline for submission of bids: July 04, 2025.
Details at the link.
***
Weighted drill pipes without threads in assortment.
Expected purchase price: UAH 11.70 million excluding VAT
Deadline for submission of bids: July 09, 2025.
Details at the link.
***
We invite reliable partners to cooperate!
“Ukrnaftais the largest oil company in Ukraine and the operator of the national network of filling stations. In March 2024, the company took over the management of Glusco’s assets and operates 545 filling stations – 461 owned and 84 managed.
The company is implementing a comprehensive program to restore operations and update the format of its filling stations. Since February 2023, the company has been issuing its own fuel coupons and NAFTAKarta cards, which are sold to legal entities and individuals through Ukrnafta-Postach LLC.
Ukrnafta’s largest shareholder is Naftogaz of Ukraine with a 50%+1 share.
In November 2022, the Supreme Commander-in-Chief of the Armed Forces of Ukraine decided to transfer to the state a share of corporate rights of the company owned by private owners, which is currently managed by the Ministry of Defense.
UKRNAFTA has been ranked in the TOP-5 of the Institute of Consumer Expertise. Its experts checked compliance with state standards of diesel fuel at Ukrainian gas stations. As a result, diesel from UKRNAFTA turned out to be one of the highest quality on the market.
Sergiy Fedorenko, Commercial Director of UKRNAFTA, emphasizes that the company carefully monitors the supply of only high-quality fuel to the network.
“Before the diesel gets into our customer’s tank, it undergoes several laboratory tests: when the railcar or tanker arrives, when it is transferred to the fuel truck, and then directly at the filling station network. This is done by our laboratories as well as independent laboratories so that we can control the quality from several sides. This fully complies with DSTU and European standards,” he said in a commentary to the Yedynye Novosti TV marathon.
The TV spot reminds us that high-quality fuel is one of the main prerequisites for reliable and durable operation of your car. Because even one refueling, for example, with low-quality diesel, can lead to problems with the fuel system and engine. As a result, the car may face expensive repairs.
That’s why car owners choose only trusted gas station chains. And they, in turn, pay special attention to fuel quality control at their filling stations.
“So, of course, you need to look at the brand and the reputation of the filling station to be sure that there will be quality fuel. We carry gasoline from Poland and Germany, and diesel fuel from a huge number of supplier countries. Tankers from Canada, Sweden, Israel, and Greece bring diesel to various ports where we can import it,” added Sergiy Fedorenko.
“Ukrnafta is Ukraine’s largest oil producer and operator of a national network of filling stations. In March 2024, the company took over the management of Glusco’s assets and operates a total of 545 filling stations – 461 owned and 84 managed.
The company is implementing a comprehensive program to restore operations and update the format of its filling stations. Since February 2023, the company has been issuing its own fuel coupons and NAFTAKarta cards, which are sold to legal entities and individuals through Ukrnafta-Postach LLC.
Ukrnafta’s largest shareholder is Naftogaz of Ukraine with a 50%+1 share.
In November 2022, the Supreme Commander-in-Chief of the Armed Forces of Ukraine decided to transfer to the state a share of corporate rights of the company owned by private owners, which is now managed by the Ministry of Defense.
The median sale price of apartments on the secondary housing market in Ukraine in May 2025 rose by 16% compared to May 2024, to UAH 2.3 million, and houses by 25%, to UAH 2.7 million, according to data from the OLX Real Estate portal. According to OLX analytics, the number of active ads for apartments for sale on the secondary market in Ukraine decreased by 12% over the year, to 254,200. At the same time, the number of responses increased by 37%.
In Kyiv, the number of active listings for apartments for sale in May 2025 also decreased overall. Listings for one-room apartments decreased by 17%, two-room apartments by 13%, and three-room apartments by 1%. At the same time, the number of responses increased by 52%, 34%, and 29%, respectively.
According to OLX, the average number of responses to an apartment sale listing in Ukraine as a whole is 3.5. In Kyiv, one-room apartments are in the highest demand on the secondary apartment market, with six responses per listing.
The median price in advertisements for the sale of apartments in Kyiv increased: for one-room apartments by 12% (to UAH 2.9 million), two-room apartments by 17% (to UAH 4.6 million), and three-room apartments by 16% (to UAH 6.6 million).
It is noted that the number of active advertisements for the sale of houses on the secondary market in Ukraine has increased by 4% over the year, to 115,200. The total number of responses has increased by 26%, with an average of 4.7 responses per advertisement for the sale of a house.
As reported in the National Bank of Ukraine’s financial stability report for June 2025, actual home sales transactions show a slight increase in prices compared to the prices listed in advertisements.
The shadow market for cigarettes continues to grow in Ukraine. In April 2025, the overall level of illegal trade in tobacco products reached 16.2% (compared to 14.1% at the beginning of 2025), according to a study by Kantar Ukraine “Monitoring of illegal trade in tobacco products in Ukraine,” published on Monday.
Kantar Ukraine specified that with this level of illegal cigarette products on the market, the annual loss to the state budget due to tax evasion amounts to UAH 25.2 billion, and the volume of the shadow cigarette market in Ukraine exceeds 5 billion cigarettes.
“In April, we again observed growth in the market for illegal tobacco products in Ukraine and a significant increase in the share of counterfeit products to 8.8% (compared to 6.4% in February 2025). According to average annual figures, more than a third of counterfeit products (39%) have signs of fake excise stamps. Among them, according to the inscription on the packaging, 33% were produced by Marshall Fine Tobacco (United Tobacco)/VK Tobacco FZE and 6% by Ukrainian Tobacco Production,” said Tatyana Sverdlik, an analyst at Kantar Ukraine.
At the same time, a significant share is accounted for by illegal products marked “Duty Free” or intended for export and illegally sold in Ukraine. More than half of such products, according to the inscription on the packaging, were produced by the Vinnikivska Tobacco Factory. Compliment (47%) and Lifa (5%) are the main brands in this category. The remaining 43% of illegal products are brands produced by Marshall Fine Tobacco, the most common of which are Marshall (26%), Urta (9%), and Brut (3%).
The study notes that the largest volumes of trade in illegal tobacco products are traditionally recorded in six regions, which together account for 71% of the market for such products Dnipropetrovsk – 27%, Odessa – 13%, Lviv – 10%, Kharkiv – 9%; Kyiv and Kyiv region – 7%, Khmelnytskyi – 6%.
A significant share of illegal tobacco product sales comes from kiosks and shops – in April 2025, 67% of illegal tobacco products were sold through these channels, according to Kantar Ukraine.
A special tribunal to investigate the crimes of Russian aggression against Ukraine complements the existing mechanisms of justice, becomes a critical step for the establishment of the rule of law in international relations and ensuring the inevitability of punishment for serious international crimes, said Victoria Zagoruy, attorney at Barristers.
Commenting to Interfax-Ukraine on the legal aspects of the establishment of the special tribunal, she noted that “the tribunal is a temporary international judicial body (ad hoc) established for a specific purpose: to investigate and prosecute those responsible for committing this key crime.” The statute of the special tribunal specifies that the “crime of aggression” means the planning, preparation, initiation or execution by a person in a position to exercise effective control over or direction of the political or military activities of a State of an act of aggression which, by its nature, gravity and scale, constitutes a clear violation of the UN Charter.
“The need to create such a body is due to the so-called jurisdictional gap in international law. The main obstacle to the investigation of the crime of aggression in national courts or the International Criminal Court is the immunity of senior officials (head of state, government, foreign minister), which protects them from foreign jurisdiction during their tenure. The special tribunal, which will act on behalf of the international community and is being created under the auspices of the Council of Europe, is designed to overcome this immunity,” the lawyer emphasized.
Zagoruy noted that “this mechanism will allow to bring to justice the top leaders of the aggressor state, regardless of their current status.”
In addition, the mechanism of the special tribunal provides for direct and indisputable jurisdiction over the crime of aggression, which allows prosecuting the leadership of the Russian Federation, despite the fact that the Russian Federation is not a party to the Rome Statute.
The special tribunal will also have international legal personality, rather than the status of a hybrid or national structure, and will provide for the possibility of in absentia proceedings, which “allows justice to be done even if the accused are not physically present in the courtroom” and means that “amnesty granted to any person under the jurisdiction of the special tribunal is not an obstacle to prosecution.”
“This is extremely important because it prevents national or third-party amnesties from obstructing justice for the crime of aggression. Thus, the establishment of the Special Tribunal is a historic step that clearly establishes accountability for senior officials for the crime of aggression, completely disregarding their personal immunities,” she said.
Commenting on the relationship between the special tribunal and the International Criminal Court (ICC), Zagoruy noted that “these are different but complementary institutions. In particular, the ICC has jurisdiction over four major international crimes: genocide, crimes against humanity, war crimes, and the crime of aggression.
Ukraine has recognized the ICC’s jurisdiction over crimes against humanity and war crimes committed on its territory by submitting two applications under Article 12(3) of the Rome Statute. This allows the ICC prosecutor to investigate and prosecute these categories of crimes.
At the same time, the ICC’s jurisdiction over the crime of aggression is limited. According to the Kampala Amendments to the Rome Statute, the ICC can only consider this crime if the aggressor state and the victim state are parties to the Rome Statute and have ratified these amendments, and if the case is referred to the ICC by the UN Security Council.
“Since neither Ukraine nor the Russian Federation has ratified the Rome Statute and the amendments on aggression, and the Russian Federation, as a permanent member of the UN Security Council, has a veto, the ICC cannot independently prosecute this particular crime. This creates the very jurisdictional gap that the ad hoc tribunal is intended to fill. It will not duplicate the work of the ICC, but will complement it, providing comprehensive coverage of crimes committed during the aggression,” explained Zagoruy.
She emphasized that the ICC investigates war crimes, crimes against humanity and genocide committed on the territory of Ukraine, and this applies to specific actions: the killing of civilians, torture, deportations, destruction of civilian infrastructure, etc. Both ordinary perpetrators and their commanders may be held responsible for them.
At the same time, the special tribunal will focus exclusively on the crime of aggression, i.e., the very fact of planning, preparing, initiating and waging a war of aggression. The responsibility for this crime lies solely with the highest political and military leadership of the aggressor state.
Zagoruy also noted that the interaction between the Special Tribunal and the ICC will be based on the principle of ne bis in idem (no one can be punished twice for the same act), which is fundamental in international law.
“A person cannot be convicted twice for the same crime. However, the same person may be convicted of different crimes. For example, an official can be convicted by a special tribunal for the crime of aggression (for ordering to start a war), and the same official can be convicted by the ICC for crimes against humanity (for example, for the policy of deporting children) or for war crimes (for orders to indiscriminately shell cities),” the lawyer explained.
She noted that the ad hoc tribunal may enter into agreements or practical arrangements with the ICC to ensure the effective exercise of their respective jurisdictions. In particular, whenever a person subject to an ICC arrest warrant is detained in ICC detention centers, the special tribunal will prioritize the proceedings before the ICC.
“The activities of the courts will be coordinated to ensure comprehensive justice and full accountability for all categories of international crimes. By focusing exclusively on the crime of aggression, the tribunal aims to bring to justice the top leadership of the Russian Federation, those responsible for the decision to start the war. For victims of the war who suffered from specific crimes, such as the destruction of property or illegal detention, the national courts of Ukraine and the ICC remain the mechanisms of justice, which are already actively working to document and investigate these crimes,” Zahoruy emphasized.
