Issue No. 1 – March 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
Since the beginning of March, the Ukrainian currency market has undergone significant changes in the dynamics of the dollar and euro. While the dollar was gradually strengthening in February, it began to decline in early March, followed by a gradual recovery after March 10, and the euro, after relative stability, began to grow.
Domestic Ukrainian factors had virtually no impact on this situation, which reflects global processes in the international currency market.
The main international factors that influenced the exchange rate dynamics:
Ø The start and further escalation of tariff wars launched by the administration of the new US president, which pose risks to US economic growth and accelerating inflation. This encouraged global investors to exit the dollar in search of more stable assets.
Ø The dollar is weakening on the global market due to softer statements by the US Federal Reserve. Investors have begun to expect a likely rate cut later this summer, which has weakened support for the dollar.
Ø The European Central Bank (ECB) had previously signaled possible stimulus to support the economy, which led to the euro’s weakness. However, since the beginning of March, EU macroeconomic indicators have improved, pushing the euro to strengthen.
Key internal factors affecting the Ukrainian FX market:
Ø Decreased demand for the dollar after a large-scale import of cash currency in February: according to the NBU, $1.316 billion in cash dollars and the equivalent of $450 million in euros were imported into Ukraine.
Ø The NBU’s interventions help to smooth out exchange rate volatility and maintain a controlled market situation.
Ø Increased budget expenditures in March traditionally create additional demand for foreign currency, which may affect the correction of the hryvnia exchange rate.
Exchange rate dynamics
Ø Since the end of February, the dollar has been accelerating its pronounced downward trend, slipping from the average of UAH 41.42-41.97/$ to UAH 41.1-41.65/$. This downward trend primarily reflects the situation on the global currency market and the lack of domestic drivers for the dollar to hryvnia exchange rate amid decreasing pressure on the national currency and a temporary decline in demand for the dollar. The appreciation observed since March 10 may be only a temporary correction, which generally reflects the temporary volatility of the US currency.
Ø In contrast, the euro hryvnia exchange rate moved in the opposite direction. Since the beginning of March, it has soared from 43.35-44.05 UAH/€ to 44.46-45.15 UAH/€, effectively returning to the level of mid-January this year after a long slump. This behavior of the euro is also entirely due to external factors.
Much more informative for analyzing the state of the Ukrainian foreign exchange market is the dynamics of spreads between buying and selling rates, which are an indicator of market liquidity and allow us to diagnose the level of uncertainty among its key operators.
Ø In March, we saw the average spread for the dollar narrow below February’s levels, from 50-60 kopeks to 40-50 kopeks, and in some cases to 30 kopeks. This indicates a balanced supply and demand for the US currency.
Ø For the euro, the average spread increased from 50-60 kopeks to 70-80 kopeks, as the sharp rise in the euro made the market less predictable, forcing banks and exchange offices to put in higher margins.
Thedeviation of the market rate from the NBU’s official exchange rate remained insignificant, confirming that the regulator’s currency policy is in line with the market balance. However, for the euro, this deviation increased in the second half of March, indicating that the market reacts more quickly to global factors, often outpacing the NBU’s official exchange rate adjustments.
USD exchange rate outlook
Ø In the short term, over the next 2-4 weeks, the dollar is likely to remain in the range of UAH 41.30-42.30 per dollar. The main factor that will influence the situation will be the policy of the National Bank of Ukraine, as well as possible decisions of the US Federal Reserve regarding the discount rate. If the NBU continues to actively intervene in the market through interventions, exchange rate fluctuations will be minimal.
Ø During the spring months, in the medium term (2-4 months), the dollar may move to the range of UAH 41.50-42.50 per dollar. In this period, the demand for foreign currency is expected to increase, in particular due to increased budget spending and import activity by businesses. An additional, though unlikely, risk is possible delays in international financial assistance, which could put temporary pressure on the hryvnia.
Ø In the longer term, i.e., over 6 months, the dollar has the potential for gradual appreciation due to the persistence of key factors of depreciation pressure on the hryvnia. If economic conditions remain unchanged, it may return to the range of UAH 42.50-44.00 per dollar, but we should remember the budget exchange rate target of UAH 45 per dollar, which leaves room for the exchange rate to be used for fiscal purposes to manage budget revenues. At the same time, the US Federal Reserve’s policy may affect global dollar liquidity: if the regulator begins to ease monetary policy, the US currency will remain relatively stable despite the hryvnia’s devaluation.
Euro exchange rate forecast
Ø In the coming weeks, the euro is likely to reach and stabilize in the range of UAH 44.80-45.70 per euro. After a sharp jump, the market may enter a correction phase where there will be no significant fluctuations.
Ø In the medium term, over the next 2-4 months, the dynamics of the euro will largely depend on the policy of the European Central Bank. If the ECB continues its measures to support economic growth, the euro may remain in the range of UAH 44.50-46.00 per euro. At the same time, the euro may weaken somewhat if there are prerequisites for a stronger dollar or if negative economic news from the EU.
Ø In the long run, the euro has the potential for relative stability or moderate growth. If the economic situation in Europe improves, the euro may remain in the range of UAH 45.00-46.50 per euro. However, as in the case of the dollar, macroeconomic factors and risks to the European economy may have a significant impact on the euro’s further dynamics.
Recommendations for businesses and investors
Diversifying your portfolio across currencies and assets is more important than ever: consider your individual needs first. Depending on where and how long before you plan to spend your foreign exchange in euros or dollars, this currency should be the dominant currency in your savings portfolio to avoid conversion losses. Other reserve currencies in your portfolio should act as a stabilizer: when one currency falls, the other rises, compensating for at least part of the exchange rate losses.
Regularly analyze and revise the structure of foreign currency savings: in the current turbulence and poor predictability in international currency markets, you should analyze the appropriateness of the current portfolio structure at least once a month and adjust it if necessary.
Currency speculation: In general, the current situation is quite favorable for cautious speculation, but it will require careful monitoring of key indicators and information signals to respond to changes in market trends in a timely manner. Experienced investors can take advantage of the current opportunities, while inexperienced investors should stick to conservative strategies focused on preserving their savings.
As for the hryvnia, we reiterate our recommendation to hold it only in the amount necessary to finance current expenses, service short-term financial obligations, and for unforeseen expenses in special life situations.
The basic recommendation for all currencies is to keep all savings as liquid as possible, avoiding long-term investments. This will ensure freedom of maneuver in the face of currency turbulence and poor predictability that will accompany us at least in the medium term.
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 warranties 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 assessment 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.
The volume of foreign direct investment (FDI) in the economy of mainland China in January-February decreased by 20.4% compared to the same period last year and amounted to 171.21 billion yuan ($23.87 billion), according to the Ministry of Commerce. The manufacturing industry accounted for 47.82 billion yuan, and the service sector for 120.49 billion yuan.
At the same time, the UK’s FDI in China grew by 87.9%, Germany’s by 54.7%, and South Korea’s by 45.2%, Xinhua cited the ministry’s data.
At the same time, 7,574 thousand new enterprises with foreign capital were registered in the country in two months, which is 5.8% more than their number in the same period in 2024.
As reported, the volume of FDI in 2024 fell by 27.1% to 826.25 billion yuan. This is the largest decline in the history of calculations (since 2008).
As of March 13, Ukraine sowed 83 thousand hectares of spring grains and legumes in 15 regions, the press service of the Ministry of Agrarian Policy and Food reported.
According to the report, a week ago, the work was carried out in two southern regions – Mykolaiv and Odesa. Now they have been joined by 13 more regions.
Currently, barley has been sown on 45.2 thousand hectares, peas – on 17.8 thousand hectares, spring wheat – on 12.9 thousand hectares, oats – on 7.2 thousand hectares.
Ternopil – 15.2 thousand hectares, Volyn – 11 thousand hectares, Rivne – 10.84 thousand hectares, Vinnytsia – 10.1 thousand hectares and Mykolaiv – 10 thousand hectares are the leaders in sowing spring crops.
The Ministry of Agrarian Policy reminded that in 2025 Ukraine plans to plant more than 5.7 mln ha of spring grains and legumes, which corresponds to the level of 2024. The new season is characterized by the increase in the area under spring wheat by 28% (to 222.8 thou hectares), which is due to the growing demand from processors and exporters.
As reported, in 2024 the sowing campaign started on February 29. As of March 14, the sowing campaign was conducted in 14 regions of Ukraine, where 128.1 thou hectares of grains and pulses were planted, including 12.9 thou hectares of wheat, 69.6 thou hectares of barley, 41.5 thou hectares of peas and 3.7 thou hectares of oats.
As part of its reconceptualization, Darynok market mall has opened a family entertainment complex, Smile Park, the mall’s press service reports.
“We have planned a number of dramatic changes for 2025. The first step was the opening of a new children’s anchor. We expect that with the emergence of the largest Smile Park on the left bank, we will be able to attract an additional 10% of traffic. We also plan to further renovate the facility to ensure comfortable shopping, recreation and entertainment,” said Andriy Fedorov, CEO of the management company of Darynok market mall City Capital Group, said Andriy Fedorov, CEO of Darynok market, City Capital Group.
It is specified that Smile Park is located on the ground floor, in the Boulevard sector. With an area of 5 thousand square meters, it is currently the largest on the left bank. Smile Park combines four entertainment concepts in one place: an extreme park for adults and children (rope park, climbing wall, extreme towers and extreme mazes), a rollerdrome (a comfortable and safe area for recreation and rollerblading training), a family complex with trampolines (town of professions, creative zones, playpen for kids) and a VR park with rides and racing simulators.
The entertainment complex also has an 800-square-meter family restaurant and five themed rooms for birthday parties.
“Darynok is the largest family-type market mall in Kyiv. In 2024, it was visited by 3.9 million people, with approximately 60% of visitors being family audiences. The total area is 68 thousand square meters, the leasable area is 45.1 thousand square meters. It has seven sales halls with approximately 2 thousand shops and retail spaces. The market mall’s assortment is widely represented by clothing and footwear categories for the whole family, large separate sectors of outerwear and wedding wear, household goods and furniture. The vacancy rate at the end of 2024 was 4%.
In January-February 2025, accrued insurance premiums under international insurance contracts “Green Card” concluded by member companies of the Motor (Transport) Insurance Bureau of Ukraine (MTIBU) increased by 6.43% compared to the same period in 2024 – up to UAH 835.6 million.
According to the MTIBU website, the number of Green Card contracts concluded during this period decreased by 11.8% to 191.3 thousand.
The amount of compensation paid on claims also decreased by 6.79% to EUR 7.131 million, the number of paid claims – by 12.3% to 2.209 thousand.
MTIBU is the only association of insurers that provide compulsory insurance of civil liability of owners of land vehicles for damage caused to third parties.
“Green Card is a system of insurance coverage for victims of road traffic accidents, regardless of their country of residence and country of registration of the vehicle. “The Green Card covers 45 countries in Europe, Asia and Africa.
According to the decision adopted by the General Assembly of the Council of the Bureau of the International Motor Insurance System “Green Card” in Luxembourg in May 2004, Ukraine became a full member of the system on January 1, 2005.
Prices for more than 200 more items of medicines may be reduced by an average of 30%, predicts Petro Bahriy, chairman of the Association of Manufacturers of Medicines of Ukraine (AMPU).
“This work (to reduce drug prices) has not been completed yet, it is ongoing, and we are now working on the next 200-250 items of drugs that will also be reduced. It will not be reduced by all 30%: some will be reduced by 30%, some by 40%, some by 20%. This will be determined by the market situation,” he said at a press conference at the Ukraine Media Center on Friday.
He noted that if one manufacturer reduces the price of one molecule, a competitor will also be forced to reduce its price.
At the same time, Bagriy noted that price cuts will have a positive effect on patients, but will lead to “huge losses” for pharmaceutical plants.
“For example, if we are talking about Darnitsa, it is about one billion hryvnias that it will lose from the price reduction. Of course, this cannot but affect the company’s investment policy, salary payments, and even some layoffs are possible,” he said.
