Issue No. 1 – March 2026
The purpose of this review is to provide an analysis of the current situation in Ukraine’s currency market and a forecast of the hryvnia exchange rate against key currencies based on up-to-date data. We examine current conditions, market dynamics, key influencing factors, and likely scenarios for future developments.
Analysis of the Current Situation in the Foreign Exchange Market
In March, Ukraine’s foreign exchange market entered a phase of increasing turbulence driven by both external and internal factors.
The exchange rate trajectory is consistently and quite rapidly moving toward hryvnia devaluation, with this trend significantly intensifying in the first half of March. The focus in March is on the military conflict between the U.S. and Iran, which is causing increased turbulence in the fuel market and contributing to the weakness of the euro. In Ukraine’s domestic market, there has been a sharp rise in demand for the dollar and the euro, while the National Bank is trying to balance high demand for foreign currency with the need to maintain international reserves at a sufficient level. Meanwhile, inflation is gaining momentum, and Ukraine’s receipt of the promised €90 billion from the EU is being delayed due to the outright dissatisfaction of Hungary and Slovakia.
Global Context
In global markets, the dollar is strengthening against a backdrop of a weakening euro. The DXY index shows that the U.S. currency has appreciated by 3.33% over the past month, while the euro is losing ground.
The main trigger is the situation in the fuel market, caused by the conflict in the Middle East. Oil prices have surged sharply as Iran has intensified attacks on oil and transportation facilities across the Middle East, fueling fears about the duration of the conflict and potential disruptions in oil supplies. The price of Brent crude rose in mid-March to over $101.40 per barrel. Moreover, the price of oil was unaffected by the International Energy Agency’s (IEA) announcement of its intention to release a record 400 million barrels of oil to mitigate the economic impact of the war between the U.S., Israel, and Iran. Currently, investors are concerned that the global economy will take longer to recover if attacks on shipping and energy infrastructure in the Strait of Hormuz continue. Some analysts have already forecast that oil prices could rise to $140 per barrel in the coming weeks.
The EUR/USD pair experienced several significant fluctuations in March, but the dollar has managed to strengthen its position. While the month began at 1.1766, by mid-March the U.S. currency had reached 1.1445. The euro is losing ground due to its economy’s reliance on fuel imports from other regions.
Investors currently view the dollar as a safe haven, especially given that the U.S. is a major energy exporter. The longer the blockade of the Strait of Hormuz lasts, the higher the chances of the dollar strengthening against the euro.
However, it is not only the situation in the Middle East that plays a role in potential fluctuations in the exchange rates of major currencies. Investors are awaiting decisions from central banks: will the Fed and the ECB react to the situation and will they change key interest rates?
Expectations regarding decisions in March are quite subdued. The point is that the European Central Bank may raise rates, but not before June. And the U.S. Federal Reserve, whose Committee meeting will take place in late March, may even postpone consideration of a change in the base rate until September. However, everything will depend on the latest data on inflation and the situation in the U.S. labor market.
New data from the Bureau of Labor Statistics showed that the U.S. economy lost 92,000 jobs in February, while inflation in the U.S. remained stable—consumer prices rose by 2.4% in February (year-over-year). However, a war between the U.S. and Iran could trigger an acceleration of inflation to over 3% in the coming months, so uncertainty regarding the Fed’s potential rate decisions is growing, and investors are focused on how the conflict in the Middle East will affect price dynamics.
Domestic Ukrainian Context
In March, the Ukrainian foreign exchange market saw rising demand in both the non-cash and cash segments. The increase in importers’ needs is linked both to purchases of energy equipment required for repairs to energy infrastructure and to a growing need for foreign currency to purchase fuel, as Ukraine is an importer of gasoline and diesel and contracts for the necessary volumes of fuel in European Union countries.
Meanwhile, Ukraine’s international reserves decreased by 5% in February and, as of March 1, 2026, stood at $54.75 billion according to preliminary data. The National Bank explained that this trend was driven by the NBU’s currency interventions and the country’s debt payments in foreign currency, and these transactions were only partially offset by inflows from international partners and from the placement of government bonds. The current level of international reserves is sufficient to finance 5.7 months of future imports.
The clear devaluation trend is driving increased demand for cash currency among the public. To prevent a cash currency shortage in the market, the NBU conducted several operations in March to exchange banks’ non-cash currency for cash currency to replenish cash reserves. Consequently, banks have sufficient reserves of foreign currency, and there is no shortage of cash dollars or euros. The NBU reported that it is monitoring the situation and is ready to support banks in supplying cash foreign currency to their teller windows.
As for international aid, it is still unknown when Ukraine will receive the first tranche of the €90 billion approved by the EU as part of its support for 2025–2027. Hungary and Slovakia’s stance is standing in the way. However, the European Union is discussing another option to help Ukraine—providing a bilateral loan of €30 billion, which would not require approval from all EU members.
The domestic currency market is under some pressure because, on the one hand, rising prices for petroleum products are stimulating increased currency purchases on the interbank market, while on the other hand, amid uncertainty regarding further aid tranches from the EU and other partners, the National Bank cannot flood the market with interventions to curb devaluation.
U.S. Dollar Exchange Rate: Trends and Analysis
During the first half of March, the U.S. dollar strengthened on the Ukrainian currency market. The official exchange rate stood at 43.2 UAH per dollar at the beginning of the month, and by the end of the second week of March, it had already reached 44.14 UAH/USD. The interbank market is moving upward in fairly sharp spurts: while March began with a rate of 43.21 UAH per dollar, by March 13, trading was taking place within the 44.12–44.17 UAH/USD range.
The cash market saw devaluation fluctuations in March. The buying rate reached the 43.80–44.10 UAH/USD range in the middle of the month, while the selling rate remained within 44.35–44.60 UAH/USD.
The dynamics of spreads between buying, selling, and the official rate indicate that banks are anticipating further exchange rate fluctuations and are therefore factoring in additional premiums and risks into their rates. The lack of predictability and balance is reflected in the widening of spreads between buying and selling rates in the cash market to 0.45–0.60 UAH/USD.
Key influencing factors:
· Rising demand for foreign currency in the interbank market: importers are increasing their currency purchases, particularly amid rising oil prices.
· Support for the currency market from the National Bank: The NBU responds to spikes in demand with interventions, and the NBU also supports bank tellers to ensure the necessary volumes of foreign currency cash.
· International factors: the strengthening of the dollar in the global market (the DXY index has risen by 3.33% over the past month) is increasing pressure on the hryvnia, compounded by the oil factor, as rising oil prices are driving additional demand for foreign currency, causing demand to grow.
· Market behavioral expectations: The dollar remains the primary asset in the domestic market, with demand rising significantly, fueled by the exchange rate breaking through the psychological threshold of 44 UAH/USD.
Forecast
· Short term (1–2 weeks): base range of 43.90–44.30 UAH/USD, with a likely bias toward 44.20 UAH/USD.
· Medium term (2–3 months): 44.30–44.90 UAH/USD. On the international market, the dollar’s strengthening will be influenced by expectations of stability in the Fed’s rate decisions, as well as the situation in the Middle East. Hostilities in Iran are driving up oil prices, which is seriously weakening the euro’s position.
· Long-term (6+ months): The baseline scenario projects a devaluation of the hryvnia to 44.4–45.5 UAH/USD. Key influencing factors will include the situation on the front lines in Ukraine, the resolution of the issue regarding the arrival of the first tranche of financial aid from the EU to Ukraine, the gap between state budget revenues and expenditures, and the extent of the dollar’s strengthening in the global market.
Euro exchange rate: dynamics and analysis
In the first half of March, the euro-to-hryvnia exchange rate fell, driven by rising global energy prices and investors’ return to the dollar as a safe-haven asset. The corresponding strengthening of the dollar was also reflected in the value of the euro in Ukraine, where the month began with an official exchange rate of 51.02 UAH/EUR, and by mid-month the rate reached 50.66 UAH/EUR.
In the cash segment, the euro exchange rate remained virtually unchanged during the first two weeks of March, driven by relatively high demand.
At the beginning of the month, the euro buying rate at banks and currency exchange offices was 50.3–50.7 UAH/EUR, and the selling rate was 51.3–51.4 UAH/EUR; by mid-March, the euro buying rate stood at 50.2–50.70 UAH/EUR, and the selling rate was 51.1–51.50 UAH/EUR.
Banks factor their risks and the high volatility of the euro into their rates, which is why spreads are widening: in mid-March, the spread between the euro’s buying and selling rates was 0.65–1 UAH/EUR.
Key influencing factors:
· Global weakening of the euro: The euro-to-dollar exchange rate fell to 1.1445 in mid-March, which also affected the euro’s trajectory in the Ukrainian domestic market.
· Expectations of unchanged Fed monetary policy: The dollar is bolstering investor confidence that the benchmark rate will not be changed in March; the international situation and rising oil prices are also weighing on the euro.
· Inflation in the EU may rise due to higher energy prices: this could influence the ECB’s monetary decisions but will not prevent the euro from weakening.
· High demand for cash currency in Ukraine: The NBU is supplying banks with cash to prevent a shortage in the cash market.
Forecast
· Short term (2–4 weeks): given external factors and stable demand, the euro exchange rate may remain within the range of 50.85–51.70 UAH/€.
· Medium term (2–4 months): a break above 52.5 UAH/€ is likely, especially in the event of a sharp strengthening of the dollar in the global market.
· Long-term (6+ months): provided that inflation rises in the EU and the US and central banks decide to adjust benchmark rates, as well as if high oil prices persist for an extended period, a rise to levels above 53.00–53.50 UAH/€ is likely.
Recommendations for businesses and investors
March and April will be full of exchange rate “surprises,” as exchange rate trajectories may be quite volatile and move in different directions. Given the high risks for investors due to the instability of the global security situation and the overheated oil market, currency strategy must remain cautious and flexible, while also accounting for various possible scenarios.
Security – the top priority. Financial instruments are needed that allow for a quick response to a paradigm shift. This means avoiding fixed-term deposits without the option of early termination, as well as focusing on preserving assets without losses, which typically involves holding cash reserves in foreign currency.
Liquidity – a fundamental requirement. Currency assets should be held in liquid currencies, with the dollar and euro remaining the primary ones. However, investors seeking to diversify risks should also consider Swiss francs and British pounds.
The dollar is the cornerstone of currency strategy. The strengthening of the U.S. dollar reinforces the view that dollar holdings should account for at least 50% of an investor’s currency portfolio. The hryvnia’s depreciation trend underscores the importance of holding funds in dollars and, due to uneven exchange rate fluctuations, offers opportunities for short-term speculative trades.
The euro – the decline may turn into growth. Currently, the euro’s exchange rate dynamics are driven by the conflict in the Middle East and the situation in the oil market. However, in the long term, the euro may regain its footing if oil prices stabilize and inflationary pressures in Europe ease. In a balanced currency portfolio, it is advisable to hold about 30% of assets in euros.
Spreads—one of the indicators for decision-making. In the spring of 2026, spreads are widening in both the USD/UAH and EUR/UAH pairs. This is a consequence of high uncertainty and risks faced by market operators, who are factoring in potential high volatility into their exchange rates. For investors in such a situation, it is important not to make hasty moves, but when a narrow spread is present, to consider a quick currency purchase.
It’s time to focus on the euro. The international situation is working against the euro, but for domestic investors, the cheap euro presents a favorable opportunity to enter into euro-denominated investments. If a business model uses the euro as its base currency, it is advisable to factor in potential scenarios where the exchange rate rises above 51.5 UAH/€ in contracts.
The lack of precise exchange rate benchmarks is a reason to update your strategy, not to make hasty decisions. The unpredictability of the exchange rate trajectory creates the impression of a quick profit opportunity. However, it is important to work through several scenarios to avoid getting too carried away with risky speculative transactions.
The hryvnia is for current payments and expenses, not for long-term savings. The hryvnia exchange rate is steadily falling: in January, the interbank market tested the 42.19 UAH/USD level, and in March—44.17 UAH/USD. It makes sense to convert hryvnia holdings into one of the liquid currencies, particularly the dollar and the euro.
What’s important in the news. First and foremost, information about events in the Middle East, oil price dynamics, as well as decisions by the Fed and the ECB. In the domestic market, additional exchange rate spikes are possible due to changes in the energy sector and the receipt of new tranches of international loans and financial aid from partners.
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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