Issue No. 1 – September 2026
Analysis of the Current Situation in Ukraine’s Foreign Exchange Market
The National Bank of Ukraine is firmly keeping the hryvnia exchange rate under control, strengthening its influence by increasing the volume of foreign exchange interventions. As a result, the hryvnia is strengthening despite a serious foreign exchange shortage in the market caused by a lack of funds from exporting companies. The hryvnia exchange rate set by the NBU remained virtually unchanged during the first half of September: as of September 1, it stood at 44.52 UAH/USD, and as of September 15, it was 44.62 UAH/USD. Of course, the cost of maintaining a stable hryvnia is quite high, as the volume of interventions reached $5.915 billion between August 3 and September 4. However, demand for foreign currency remains consistently high, as preparations for winter continue, and companies are therefore continuing to import energy equipment. The difficult situation with grain exports, caused by regular Russian attacks on port infrastructure and ships, is creating additional pressure on the foreign exchange market. According to the Ministry of Agrarian Policy, total exports of grains and legumes since the start of the 2026/27 marketing year amount to 4.255 million metric tons, compared to 5.162 million metric tons a year earlier. The resumption of Russian attacks on gas stations will also mean a need for additional equipment and fuel purchases, which must also be paid for in foreign currency—with the NBU remaining the primary seller on the interbank foreign exchange market.
Global Context
The global market is experiencing its final days of complete uncertainty, as the Federal Reserve (Fed) is set to announce its interest rate decision on September 16. Currently, the Fed is expected to raise rates by 25 basis points. A new report on U.S. inflation showed that prices rose more than expected in August. According to data from the Bureau of Labor Statistics, the Consumer Price Index rose 3.4% year-over-year and 0.4% month-over-month in August, which was fully in line with the consensus forecast. Core inflation slowed to 2.4% year-over-year (the lowest level since 2021), but its monthly increase of 0.3% was higher than the 0.2% forecast by economists. According to CME FedWatch, markets are pricing in a 90% probability of a rate hike at the Fed’s September 16 meeting.
Meanwhile, gold is rebounding strongly. U.S. gold futures rose 0.1% to $4,409.30 per troy ounce, driven by the Consumer Price Index data and, consequently, expectations of a Fed rate hike in September.
The EUR/USD pair is trading around 1.1530 USD/EUR in mid-September, although the dollar periodically dipped to 1.1630–1.1648 USD/EUR during the first two weeks of the month. However, compared to August, when the exchange rate peaked at 1.1709 USD/EUR, the dollar has been steadily strengthening in September. This is happening precisely as the Fed’s policy meeting—the “H-hour”—approaches.
Domestic Ukrainian Context
In the first half of September, the foreign exchange market was under pressure from high demand for foreign currency. The volume of NBU interventions is increasing: while the NBU sold $1.018 billion on the interbank market during the first week of August, it sold $1.329 billion during the week of August 31 through September 4. In total, from the beginning of August through September 4, according to data published by the National Bank, the regulator’s currency sales amounted to $5.915 billion, while its currency purchases totaled only $0.45 million.
The increase in the volume of interventions is leading to a rapid decline in international reserves. According to the NBU, Ukraine’s international reserves as of early September, based on preliminary data, stood at $48.66 billion. They had decreased by 5% in August. The National Bank explained that this trend was driven by a reduction in international financial aid, while the volume of foreign exchange interventions remained at a level close to that of July.
Demand for foreign currency among the public is growing because, against the backdrop of stable exchange rates, citizens are choosing to convert their savings from hryvnia to dollars and euros for a sense of security amid high uncertainty and the prolonged continuation of military operations. In August, net foreign currency purchases by households increased by 26% to $0.562 billion, while in July the balance between purchases and sales stood at $0.5 billion.
Foreign currency is becoming not only a way for households to avoid losses in the event of a hryvnia devaluation, but also an opportunity to preserve their funds amid rising inflation. And inflation in Ukraine is rising. According to the NBU, it accelerated to 8.1% year-over-year in August. Among the main reasons are rising fuel prices, as well as higher administrative inflation amid increases in water supply and wastewater disposal rates. NBU experts note that price pressures remain elevated due to the consequences of Russian military aggression and the war in the Middle East, while the intensification of Russian attacks on logistics, manufacturing, and energy infrastructure facilities is increasing business costs and limiting the domestic supply of goods and services.
Significant challenges are emerging regarding the fulfillment of the state budget revenue plan. As Finance Minister Serhiy Marchenko recently stated, the government has established a procedure for financing expenditures under conditions of limited liquidity: upon receipt of funds, the security and defense sectors will be financed first, with the remaining expenditures covered only if additional resources become available.
Ukraine has already received the main international aid packages planned for 2026. However, there is news of a new multi-billion package that has already been approved by the European Commission. This amounts to 6.1 billion euros for the purchase of drones and missiles for the Patriot air defense system. As for support for social needs through new tranches from the EU, there is currently no clear information on how much additional funding Europe will allocate to Ukraine by the end of 2026. However, European Commission spokesperson Balázs Újvári recently stated that the European Commission continues to assess the situation with Ukraine’s public finances to determine the country’s priority needs for additional funding this year. Therefore, the EU will discuss potential sources of additional funding in detail and subsequently announce the amounts of additional tranches to support Ukraine’s state budget.
U.S. Dollar Exchange Rate: Trends and Analysis
In the first half of September, the hryvnia initially managed to strengthen to 44.46 UAH per dollar, but then the National Bank of Ukraine (NBU) gradually brought the exchange rate back to its late-August level through interventions; as of September 15, the exchange rate stood at 44.62 UAH/USD. The hryvnia’s future trajectory depends entirely on the volume of interventions the National Bank is prepared to carry out.
In the cash market in mid-September, the buying rate was 44.20–44.50 UAH/USD, and the selling rate was 44.80–45.00 UAH/USD. Spreads have remained virtually unchanged, ranging between 0.50–0.60 UAH/USD.
Key influencing factors:
· Rising demand for foreign currency in the interbank foreign exchange market. Businesses and infrastructure damaged by shelling require restoration, and equipment is being purchased abroad, which is driving additional demand for foreign currency.
· The NBU controls the exchange rate and keeps the hryvnia within strict limits. The NBU remains the primary seller of foreign currency, and its participation in trading determines the exchange rate.
· The public seeks to safeguard its savings, and consequently, demand for foreign currency in cash is rising. Anticipating blackouts, a harsh winter, new logistical challenges, and possibly commodity shortages, citizens are accelerating the transfer of their savings into major currencies—the dollar and the euro.
· International factors: The conflict between the U.S. and Iran continues, significantly destabilizing international security and oil prices. Meanwhile, U.S. President Donald Trump has stated that the war in the Middle East will end after the midterm congressional elections, which will take place in November.
· Market expectations: In the global market, expectations are centered on the Federal Reserve’s September meeting, and traders are forecasting a 25-basis-point increase in the Fed’s benchmark interest rate. In Ukraine, attention is focused on the new strategy of drone and missile attacks on rear cities, which is causing economic losses and heightening public fears about getting through the winter.
Forecast
· Short term (1–2 weeks): base range of 44.65–44.95 UAH/USD; fluctuations may move in different directions depending on the volume of NBU interventions.
· Medium term (2–3 months): 44.90–45.60 UAH/USD. On the international market, the dollar may strengthen in response to the Fed’s rate hike, as the value of Treasury securities—which will attract investors—will automatically rise. No sharp fluctuations are expected in Ukraine, and if the National Bank adopts a devaluation policy, it will occur very gradually with short-term pullbacks.
· Long term (6+ months): In the baseline scenario, the trend toward devaluation remains, as before, and by the end of winter—assuming the situation regarding the state budget deficit worsens and there are fairly prolonged delays in the receipt of new tranches of international aid—the exchange rate could reach 45.80–46.50 UAH/USD. As previously forecast, Russia’s massive attacks on cities, infrastructure, and businesses are leading to increased pressure on the foreign exchange market, as import needs automatically rise. Exchange rate fluctuations will be most influenced by new inflows of international aid, the extent of damage caused by the attacks, and fluctuations in international oil prices.
Euro Exchange Rate: Trends and Analysis
During the first half of September, the euro initially strengthened on the Ukrainian market but then retreated. While the official exchange rate was 51.64 UAH/euro at the beginning of the month, it stood at 51.52 UAH/euro as of September 15. As before, the euro’s exchange rate dynamics in Ukraine are influenced by a single factor: the euro’s position on the international market.
On Ukraine’s cash market, the buying rate ranges from 51.05 to 51.40 UAH/euro, while the selling rate ranges from 51.80 to 52.00 UAH/euro. There is a very noticeable trend toward wide spreads: in the first half of September, the spreads between the euro’s buying and selling rates widened to 0.80–1.0 UAH/EUR.
Key influencing factors:
· On the international market, the euro still outperforms the dollar.
Currency quotes are most influenced by the ECB’s recent decision to raise the key deposit rate by 0.25 percentage points to 2.5%.
· Risks to EU economies are mounting, calling into question the euro’s further strengthening in the global market. Europe’s economic outlook is considered extremely uncertain, and the risk of accelerating inflation remains high.
· Demand for the euro remains high in the cash market. Citizens are purchasing euros—both in cash and non-cash forms—to build savings, pay for their children’s education, prepare for potential migration, and for other purposes. Although the dollar dominates sales in the cash market, the euro’s share is growing steadily in 2026.
Forecast:
· Short term (2–4 weeks): On the Ukrainian market, the euro may trade within the range of 51.60–51.80 UAH/euro.
· Medium term (2–4 months): If the euro changes direction on the international market as a result of the Fed’s September decision to raise interest rates, the official exchange rate in Ukraine may range between 51.70 and 51.95 UAH/euro.
· Long term (6+ months): Next year, the official euro exchange rate could reach a range of 52.80–53.50 UAH/EUR. The main factors influencing the euro exchange rate are inflation in the U.S. and EU countries, the monetary policies of the Fed and the ECB (i.e., planned changes to the benchmark interest rate), escalation or, conversely, a lull in the Middle East, and energy price trends.
Recommendations for Businesses and Investors
By the end of September, fluctuations in the euro/dollar exchange rate may stabilize. These fluctuations will be primarily driven by the monetary policy of the U.S. Federal Reserve.
The dollar may soon regain ground, while the euro will lose value. The dollar will be supported by the U.S. Federal Reserve’s decision to raise the benchmark interest rate by 25 basis points. This will affect the price of U.S. Treasury bonds and signal to investors to invest in the dollar.
The Fed is preparing to adjust interest rates. Rising inflation in the U.S. has deprived the Fed of the opportunity to lower rates, and markets are now pricing in a rate hike at the Fed’s next meeting. This will provide support for the U.S. dollar while simultaneously putting downward pressure on the euro.
Politics also plays a role in the EUR/USD currency pair. The U.S. is actively preparing for the midterm congressional elections in November, which means that intense political battles in the U.S. will periodically push the dollar to peak levels.
The U.S.-Iran conflict—the timeline for a resolution remains unknown. In the Middle East, the war in Iran is creating new risks for the currency market, as the situation is negatively impacting the oil market. During this period, investors would be wise to consider several scenarios and multiple currencies when building their currency reserves.
The key is investment security. Although the hryvnia is holding steady at up to 45 UAH/USD, the national currency is best suited for urgent and one-off decisions, while a long-term plan should include liquid currencies—the dollar and the euro.
Investment liquidity—after a detailed analysis of the situation. The high volatility of the euro/dollar pair signals the need to develop a currency plan that takes key influencing factors into account, and at the core of the strategy, it makes sense to plan investments in the most liquid currencies—the dollar and the euro. The optimal ratio this fall could be 50/50 or 65/35 (with a larger share of the dollar).
Diversify your currency portfolio using liquid currencies. If an investor’s plan includes not two but four currencies, it is worth considering the British pound and the Swiss franc. The share of savings in these two European currencies can reach 20%.
The investor’s goal is to make cautious and reliable investments. This means that the majority of savings should be held in liquid currencies, with a smaller portion (up to 15%) allocated to other instruments—among which purchasing three-month government bonds denominated in foreign currency appears to be the optimal choice.
Central banks will indicate where exchange rates are headed on the global market. Paying attention to the monetary policies of the EU and the U.S. will help you rebalance your currency portfolio in a timely manner as part of a medium-term investment strategy.
It’s important not to panic. Markets are often influenced by unpredictable events, but an investor’s strategy is their personal financial plan; therefore, a cool-headed assessment—not emotions—will help avoid risks.
What’s important in the news. First and foremost, news from the U.S. regarding the Federal Reserve Committee’s decision on changing the benchmark interest rate. We are also analyzing statements from U.S. President Donald Trump regarding the war in Iran. We are monitoring oil and gold prices. The most important signal for adjusting our strategy will be a strengthening of the dollar to 1.1350–1.1400 USD/EUR. In Ukraine, the main factors influencing the situation on the foreign exchange market will be the NBU’s strategy for intervening in the interbank market, the state of international reserves, news regarding the receipt of multi-billion-dollar loan tranches and aid from partners (particularly in terms of budgetary support), the situation in the energy sector, and any potential news from the front lines.
This material was prepared by analysts at KYT Group, an international multi-service product-based 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 guarantees of completeness, obligations regarding timeliness, or updates or supplements.
Users of this material should 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 reliable. Before making any investment decisions, we recommend consulting with an independent financial advisor.
REFERENCE
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