The National Bank of Ukraine (NBU) reduced its currency sales on the interbank market by $53 million, or 8.4%, to $585.8 million last week, with almost no currency purchases, according to statistics on the regulator’s website. As noted by the NBU, it purchased $0.50 million worth of currency for the first time in two weeks.
Data published by the regulator during this period show that the balance was negative throughout last week, fluctuating from $11.3 million on Monday to $11.6 million on Tuesday, $13.2 million on Wednesday, and $8.5 million on Thursday.
The official hryvnia exchange rate fluctuated from 41.4018 UAH/$1 at the beginning of the week, on Wednesday the hryvnia devalued to 41.5566/$1, and by the end of the week the rate was 41.4466 UAH/$1.
On the cash market, the hryvnia exchange rate remained virtually unchanged at the end of the week: the buying rate was approximately 41.40 UAH/$1, and the selling rate was around 41.45 UAH/$1.
“The end of May 2025 is characterized by moderate stability in Ukraine’s currency market in the absence of shock changes, despite external turbulence and a complex geopolitical background. The national currency maintains a controlled exchange rate against the US dollar, while the euro/hryvnia pair continues to show increased volatility, which is associated with both global trends and internal structural shifts in the currency preferences of businesses and the population,” experts from KYT Group, a major player in the cash currency exchange market, described the situation.
In their opinion, in the medium term of 2-4 months, the dollar-hryvnia exchange rate will return to the range of 41.80-42.50 UAH/USD, provided that imports grow, domestic inflation rises, or significant signals regarding external financing are received.
In the long term, over 6+ months, KYT Group expects a likely movement towards 43.00-45.00 UAH/$1 or even higher.
The review is available at the link – https://interfax.com.ua/news/projects/1080324.html
Issue No. 1 – 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 consider the current conditions, market dynamics, key influencing factors, and likely scenarios.
Analysis of the current situation on the Ukrainian currency market
The first half of June 2025 saw a continuation of the trend of relative stability in Ukraine’s currency market in the absence of sharp shocks, significant changes, or unexpected exchange rate jumps. At the same time, the market remains in a mode of cautious anticipation on the part of both consumers and operators.
The US dollar exchange rate remains within a controlled range, showing minimal changes within the so-called floating stability. This was made possible by the systemic influence of key factors: high foreign exchange reserves, subdued consumer demand, moderate business activity, and predictable foreign exchange supply.
The euro continued its wave-like dynamics in June, with a tendency to return to growth after a slight correction in May. High sensitivity to the global context, structural demand for the euro in business operations, as well as intensified discussions in Europe on enhancing the role of the euro in the global dimension as a counterweight to the dollar, all keep the EUR/UAH pair in a zone of increased volatility and force us to monitor the EUR/USD pair.
Global context
The first significant signal in June was the European Central Bank’s 25 basis point cut in its base interest rate — the first easing since the start of its tight anti-inflation cycle. The decision was expected and had already been partially priced in, which explains the lack of immediate impact on the euro exchange rate.
At the same time, this move could open a potential cycle of rate cuts in the EU, which could affect the euro’s position in the longer term, especially if the US Federal Reserve remains more conservative. This could create a yield differential in favor of the dollar, potentially reducing the euro’s attractiveness to investors and putting pressure on its exchange rate against the dollar. In such a scenario, the euro risks losing some of its gains in the longer term.
At the same time, the Fed’s key rate remains unchanged in the US, and the institution itself is not giving any clear signals of a cut before the end of the summer. The market perceives this as a sign of internal uncertainty. Forecasting is complicated by the so-called Donald Trump factor, who often makes controversial statements or takes actions that are met with legal opposition, although the general direction of his political approach is already clear, which is a source of new risk expectations: the preservation of a protectionist course, the weakening of the institutional independence of the Fed, and radical financial initiatives. All of these factors, including internal socio-political opposition in the US to the new president’s policies, are fueling a long-term trend of gradual erosion of unconditional trust in the dollar.
Thus, despite the absence of immediate consequences, the positional struggle between the world’s two key currencies, the dollar and the euro, is entering a new phase of strategic review.
Internal context
The National Bank of Ukraine continued its gradual currency liberalization, expanding the list of permitted transactions for banks and businesses. This is evidence of the stabilisation of the domestic currency market, but the real effect of these changes will be assessed not only by the volume of repatriated income, but also by the reaction of potential investors — whether they consider such changes a signal to return capital to Ukraine.
On the other hand, the streamlining of transactions with foreign currency-denominated government bonds, which allowed businesses to circumvent the NBU’s restrictions on currency purchases, is a clear indication of the national regulator’s desire to maintain control over currency transactions and close loopholes for its quasi-legal flow through various channels.
The structure and volume of international support for 2026 remain a key factor of long-term uncertainty. The lack of guarantees of long-term international financing and Ukraine’s unclear implementation of its commitments or their questionable effectiveness could create a dangerous mix of fiscal risks and put pressure on exchange rate expectations. The market and players are naturally beginning to factor these factors into their scenarios.
This may be reflected not only in currency forecasts, but also in the pricing of importers and producers, taking into account the further devaluation of the hryvnia and the desire of the population and businesses to accumulate foreign currency, which will have a wide range of long-term consequences for the stability of the national currency and macroeconomic indicators.
Overall, the situation on the currency market remains calm, but the role of forecast factors is growing, primarily global political risks and long-term expectations regarding financial support. The Ukrainian market is increasingly living in a format of strategic balancing between current stability and future uncertainty.
US dollar exchange rate: dynamics and analysis
In June, the dollar exchange rate against the hryvnia remained stable with a slight downward trend. Over the past 30 days, the average selling rate of the dollar in banks remained at 41.75–41.78 UAH/USD. The buying rate fluctuated around 41.15–41.22 UAH/USD, while the official NBU rate was around 41.50–41.55 UAH/USD.
Over the past week, there has been a slight decline in all three key indicators: the official exchange rate returned to 41.447 UAH/USD, the buying rate to 41.16 UAH/USD, and the selling rate to 41.70 UAH/USD.
The main focus is on spreads: the selling rate has been “pressed” against the official NBU rate for most of the last period, while the buying rate shows greater deviation from it and is moving lower. This indicates that stable demand for cash currency from the population and businesses remains, while operators are reluctant to buy dollars at a higher price. This is evidence that currency market operators do not expect the exchange rate to rise beyond the usual small fluctuations and are not factoring a risk or panic premium into the dollar price. This market behavior signals calm and balance, moderate liquidity, and the absence of psychological pressure factors.
Key influencing factors:
Forecast:
Euro exchange rate: dynamics and analysis
In June, the euro continued its clear upward trend against the hryvnia, remaining the most volatile currency pair on the Ukrainian market. Over the last 30 calendar days, the euro has grown steadily: the average selling rate in banks rose from 46.90 UAH to 48.20–48.30 UAH/EUR as of mid-June. The sharpest movement occurred between June 12 and 13, when the market selling rate jumped by more than 50 kopecks at once and was “caught up” by the official NBU rate the next day. This phenomenon indicates the synchronization of the market and the regulator not only in expectations regarding the further strengthening of the euro, but also in setting prices on the market and the official exchange rate indicator. At the same time, the euro purchase rate by currency market operators showed a more gradual dynamic and did not repeat the growth rate of the selling rate.
As a result, there was a noticeable widening of the spread between buying and selling: from 60–70 kopecks to over 1 UAH. This gap is an indicator of increased nervousness among market operators: in conditions of volatility, financial institutions are trying to protect themselves from exchange rate risks by setting an additional margin as an indicator of expected instability.
Forecast:
• Short term (2–4 weeks): high chances of consolidation within 47.80–48.50 UAH/EUR with situational fluctuations depending on the actions of the NBU, external news, and market sentiment.
• Medium term (2–4 months): in the absence of external shocks, the euro has the potential to grow to 49.00–49.50 UAH/EUR, especially given the structural demand in Ukraine, the transition of many contracts to the euro, and the population’s focus on the new El Dorado, which may bring an exchange rate premium and justify expectations for long-term growth in savings.
• Long term (6+ months): The euro retains its potential for further strengthening, especially in the context of a global restructuring of currency priorities and the internal reorientation of Ukrainian business. However, volatility will remain high, so it is recommended to constantly monitor the share of this currency in portfolios. Given the combination of many factors of uncertainty, we are not publishing a long-term forecast for the euro exchange rate.
Recommendations for businesses and investors
The first half of June shows continued stability in the currency market in the dollar segment and a return to wave-like dynamics in the euro/hryvnia pair. All this is happening against the backdrop of gradual currency liberalization in Ukraine and a new phase of global investor confidence shifting between the dollar and the euro. In such an environment, currency strategy should remain flexible, adaptable, and calculated for several different scenarios.
Liquidity is paramount. All currency assets should be held in instruments that allow for quick response. Term deposits, bonds without early exit options, or pegs to a single currency are potential traps. In the coming months, the focus should be on preserving the ability to maneuver quickly rather than on returns.
The euro — rapid growth has given way to cautious turbulence. After a noticeable jump in June, the market has already factored in most of the news and events significant for the eurozone. If you need to reformat the share of this currency in your portfolio, it is better to do so gradually as spreads narrow.
The dollar remains an important element of protection. Current stability does not mean that the dollar has lost its functions and appeal. On the contrary, in the medium and long term, it is worth keeping it in your portfolio: in the fall or winter, a devaluation trend is likely for the hryvnia, which will reward patient dollar holders with strong nerves.
Spreads are the main marker for decisions. If spreads are stable in the USD/UAH pair, they are widening again in the EUR/UAH pair. This indicates a return of nervousness and uncertainty: when operators build additional margins into the exchange rate, it is a signal not to rush. When the spread narrows, it is time to analyze the entry point.
Fixed currency benchmarks are prohibited. The exchange rate predictability of recent weeks is not a basis for routine actions or excessive optimism. Continue to work with 3–4 exchange rate scenarios and test how your asset structure will perform under each of them.
Hryvnia — do not hold more than necessary. It is stable for now, but excessive accumulation of hryvnia creates risks. Hryvnia holdings in excess of operating reserves should be converted into any of the reliable currencies or instruments pegged to them.
Currency liberalization is more of a signal than a call to action. The NBU’s signals about easing restrictions are important, but so far this is more of a symbolic step. The real effect will be noticeable closer to the fall. Investors and businesses should not only monitor liberalization steps but also bear in mind the possibility of the regulator reversing its actions if the exchange rate scenario forces it to return to restrictions. It may be worth considering switching to currency instruments that are least dependent on government actions, such as cash or stablecoins based on reliable currencies.
This material has been prepared by the company’s analysts 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 responsibility for any consequences arising from the use of this information.
All information is provided “as is,” without any additional guarantees of completeness, commitment to timeliness, or updates or additions. Users of this material should independently assess the risks and make informed decisions based on their own assessment and analysis of the situation from various available sources that they themselves consider sufficiently qualified.
Before making any investment decisions, we recommend consulting with an independent financial advisor.
REFERENCE
KYT Group is an international multi-service FinTech company that has been successfully operating in the non-bank 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 included in the list of the largest taxpayers, and is one of the industry leaders in terms of asset growth and equity capital.
More than 90 branches in 16 major cities of Ukraine are located in convenient locations for customers and are equipped with modern equipment for the convenience, security, and confidentiality of each transaction.
The company’s activities comply with the regulatory requirements of the National Bank of Ukraine. KYT Group adheres to EU standards of operation, with branches in Poland and plans for cross-border expansion into other European countries.
The end of May 2025 is characterized by moderate stability on the Ukrainian currency market in the absence of shock changes despite external turbulence and a complex geopolitical background.
The national currency maintains a controlled exchange rate against the US dollar, while the euro/hryvnia pair continues to show increased volatility, which is associated with both global trends and internal structural shifts in the currency preferences of businesses and the population.
In May, the dollar exchange rate remained within the expected range, showing no significant fluctuations. This was due to stable demand for currency in Ukraine, moderate activity on the interbank market, and the restraining effect of the NBU’s significant reserves. There were no acute shortages or surges in current or speculative demand on the market.
The situation with the euro was somewhat contrasting: in the second half of May, the EU currency showed a correction after reaching its peak at the end of April. At the same time, the spread between buying and selling remained higher than for the dollar, indicating that market operators’ expectations of potential fluctuations remain unchanged.
Global context
The key external drivers remain the monetary policy of the world’s leading economies and the overall level of investor sentiment.
The US Federal Reserve has kept interest rates unchanged, citing the need for more macroeconomic data. This not only signals a cautious approach, but also demonstrates the Fed’s independence from political pressure from the new administration. These two factors are holding back the dollar’s recovery, but are not contributing to its further decline.
Europe has clearly stated its ambition to make the euro an alternative to the dollar: European Central Bank President Christine Lagarde said that the euro could become a viable alternative to the US dollar as the global standard currency for international trade. She noted that the unpredictable economic policy of the US has forced global investors to limit their appetite for the dollar in recent months, but to achieve the ambitious goal of the EU and its members, they must strengthen their financial and security architecture.
Overall, the temporary fragile balance and the absence of significant changes within the previously established trends led to a decline in the euro’s “exchange rate premium” against the hryvnia, which the euro had gained in the first quarter.
Domestic context
The National Bank continues its policy of cautious currency liberalization: in May, it allowed and increased limits on a number of new transactions for banks and businesses. This not only demonstrates the stability of the currency market, but may also serve as an additional signal to foreign investors about the gradual easing of restrictions on cross-border capital movements.
At the same time, the effectiveness of such steps will be measured not only by the volume of repatriated profits, but also by whether investors perceive this as Ukraine’s readiness to return to a model of long-term capital investment even in the face of military risk.
The likely inflow of investment could offset the next risk, which remains the biggest source of uncertainty: the amount of external support in 2026. This year, Ukraine is expected to receive the equivalent of about $60 billion in international aid, an amount that ensures the stability of the economy, the currency market, and the budget. At the same time, only $15 billion in external financing has been secured for next year, which poses a serious challenge to exchange rate stability starting in late 2025. If international partners and allies do not take on broader commitments, this could put additional pressure on the hryvnia in forecasts and the formation of devaluation expectations and, as a result, in the actual behavior of currency market participants.
Overall, May confirms that there is no panic on the currency market, but a regime of heightened caution remains in place.
US dollar exchange rate: dynamics and analysis
In the second half of May, the dollar exchange rate against the hryvnia showed a steady downward trend with a gradual decline in all three key indicators: the buying rate, the selling rate, and the official NBU rate.
After reaching a local peak at the end of April (average selling rate in banks — 41.96 UAH/USD, buying rate — 41.32 UAH/USD), the dollar began to lose ground. From mid-May to the end of May, the cash selling rate fell to 41.74 UAH/USD, the buying rate to 41.17 UAH/USD, and the official NBU rate to 41.5 UAH/USD. All these movements took place without sharp fluctuations, within controlled volatility and in line with global trends.
Key factors behind the decline in the exchange rate:
Forecast:
Euro exchange rate: dynamics and analysis
Throughout May 2025, the euro-hryvnia exchange rate showed noticeable wave-like dynamics. From the end of April to the third decade of the month, there was a gradual decline from over 47.90 UAH (sale) to a local minimum of around 46.20 UAH (purchase) and 46.90 UAH (sale) on May 20–21. In the last working week of the month, the euro returned to growth, confirming the volatile nature of the EUR/UAH pair.
Main factors:
Forecast:
Recommendations for businesses and investors
In the second half of May, Ukraine’s currency market has been stable in the dollar segment and the euro/hryvnia pair has returned to calm after a period of peak volatility. At the same time, fundamental devaluation risks remain relevant. In these conditions, currency asset management requires maximum adaptability.
1. Liquidity is an absolute priority.
All currency assets must be readily available: term deposits, long bonds, or currency in instruments without early withdrawal rights are sources of risk. Preference should be given to instruments with flexible management.
2. Dollar/euro shares should be reviewed, but not aggressively increased.
Ø The euro has emerged from its peak growth phase and is stabilizing in a higher range. Now is not the time for active entry, but there is an opportunity to selectively reformat shares in the currency portfolio. New purchases should be made when spreads narrow.
Ø The dollar exchange rate is in a downward trend, and a decline to 41.00 UAH/USD is not an exception but a scenario. However, the risks for the hryvnia are growing. If there is no urgent need for hryvnia, hold on to your dollars. It will show growth in the fall or closer to the end of the year if the fundamental factors of devaluation pressure on the hryvnia are not eliminated, which is highly unlikely.
3. Spreads are the main indicator on the euro market.
Unlike the dollar, where the market is already balanced, in the EUR/UAH pair, it is the dynamics of the spread (buying and selling and deviation from the NBU exchange rate) that demonstrate a change in expectations and signal the likelihood of further movement. A narrowing is a signal to act, while a widening is a signal to pause.
4. A flexible, multi-scenario strategy instead of fixed benchmarks.
Uncertainty about the amount of international aid in 2026 is the main long-term risk.
Follow the news with a cool head — ignore emotions and focus on facts, while developing strategies based on several different exchange rate scenarios (pessimistic, baseline, optimistic) and testing the asset structure in each of them.
5. Short-term speculation — only with precise timing.
In the EUR/UAH pair, the potential margin is still limited and the risk is high. If you do not have quick tools and access to “entry” positions with a minimal market premium, it is better to hold off.
6. Do not weaken control over the hryvnia’s share.
The hryvnia remains stable, but the accumulation of excessive hryvnia mass is undesirable. Keep only operational liquidity, and hold the rest in hedged or conservative currency instruments.
7. Currency liberalization is a signal, not an invitation to act.
The easing of currency restrictions is positive news for investors, but its effect will only be felt in the middle or at the end of the year. Consider this factor as a prospect, not as a justification for immediate action.
This material has been prepared by the company’s analysts 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 responsibility for any consequences arising from the use of this information.
All information is provided “as is,” without any additional guarantees of completeness, timeliness, or updates or additions. Users of this material should independently assess the risks and make informed decisions based on their own assessment and analysis of the situation from various available sources that they themselves consider sufficiently qualified.
Before making any investment decisions, we recommend consulting with an independent financial advisor.
REFERENCE
KYT Group is an international multi-service FinTech company that has been successfully operating in the non-bank 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 included in the list of the largest taxpayers, and is one of the industry leaders in terms of asset growth and equity capital.
More than 90 branches in 16 major cities of Ukraine are located in convenient locations for customers and are equipped with modern equipment for the convenience, security, and confidentiality of each transaction.
The company’s activities comply with the regulatory requirements of the National Bank of Ukraine. KYТ Group adheres to EU standards of operation, with branches in Poland and plans for cross-border expansion into other European countries.
The National Bank of Ukraine (NBU) last week, with almost no currency purchases, increased its sales on the interbank market by $130.95 million, or 21.0%, to $755.10 million, according to statistics on the regulator’s website.
The data published by the regulator during this period indicate a change in the situation on the cash currency market: the balance was negative every day, fluctuating from $2.0 million on Monday to $15.3 million on Tuesday, $9.2 million on Wednesday, and $12.0 million on Thursday.
The official hryvnia exchange rate fluctuated within a narrow range from 41.5470 UAH/$1 at the beginning of the week to 41.4983 UAH/$1 at the end of the week.
On the cash market, the hryvnia exchange rate remained virtually unchanged at the end of the week: the buying rate was around 41.42 UAH/$1 and the selling rate was 41.50 UAH/$1.
As noted by KYT Group experts, the approaching tax payment period, as well as seasonal activity in the energy sector and imports of energy carriers, are adding liquidity to the market, but are unlikely to lead to significant exchange rate fluctuations provided that key current conditions remain unchanged.
In their opinion, technical and psychological support for the market is provided by the growth of international reserves to $46.7 billion (+10% in April), which creates an additional reserve of stability for the “managed flexibility” policy.
In the short term (2-4 weeks), KYT Group expects the exchange rate to remain in the range of 41.20-41.80 UAH/USD with local fluctuations of ±20 kopecks under the influence of situational factors, provided that current circumstances remain unchanged.
According to the company, in the medium term (2-4 months), the exchange rate may remain stable or shift to 41.80-42.50 UAH/USD under the influence of moderate devaluation.
Source: https://interfax.com.ua/news/projects/1071980.html
Issue No. 1 – May 2025
Analysis of the current situation on the Ukrainian currency market
In early May, the Ukrainian currency market entered a phase of controlled volatility, with no excessive demand but heightened speculative expectations.
Overall, the situation remains relatively stable in the US dollar segment and tense in the euro segment.
Key facts and drivers:
Ø The dollar continues to trend downward, pressured by global rhetoric about Fed rate cuts and risks of stagnation in the US economy.
Ø The euro, on the contrary, continues to rise in price due to the European currency’s economic strength, pent-up demand for imports, and structural changes in currency preferences and preferences of businesses and the population toward the euro.
Ø The spread between the buying and selling of the euro remains at an abnormally high level of 1.5–2 UAH, signaling increased nervousness among market operators and expectations of further movement.
Internal factors
Ø The NBU continued its policy of cautious easing of currency restrictions in May: certain forward transactions for banks and clients were resumed, and the possibilities for financing foreign representative offices of companies and settlements with corporate cards abroad were expanded. At the same time, the monthly limit of UAH 500,000 was extended to more categories of transactions, which will partially reduce the attractiveness and weight of “gray” channels for capital withdrawal. This will add transparency to the market, and foreign exchange market statistics will become more representative due to the accurate and complete reflection of information on currency movements.
Ø At the same time, the NBU’s foreign exchange reserves rose to a record $46.7 billion (+10.1% in April) thanks to funds received from the EU (ERA Loans program) and the World Bank. The reduction in the volume of NBU interventions and net currency purchases by the population strengthened stability on the interbank market and helped keep the official and market exchange rates within the forecast range.
Ø The approaching tax payment period, as well as seasonal intensification of operations in the energy sector and imports of energy carriers, will add liquidity to the market, but are unlikely to lead to significant exchange rate fluctuations provided that key current conditions remain unchanged.
Ø Consumer inflation began to slow down in April, and the NBU expects it to fall to single digits as early as summer. This reduces pressure on the hryvnia, but the level of core inflation and the risks of a tariff shock remain compelling arguments against premature relaxation.
International factors
Ø At the global level, the situation remains ambiguous. The Fed has not changed its key rate, but continues to exchange information cautiously, given inflation risks, unemployment, and the threat of stagflation due to the Trump administration’s tariff policy. The “soft landing” scenario remains the baseline, but unwavering global confidence in the dollar is gradually eroding.
Ø At the same time, the euro is consolidating as a currency increasingly used in global trade. The potential strengthening of the EU’s political center, the acceleration of economic growth in the eurozone, the increase in consumption of European products in Ukraine, and the transition of many contracts to the euro are creating stable long-term demand.
Ø Stock and commodity markets are showing cautious optimism, with investors locking in profits after news of a possible deal between the US and the UK, as well as taking into account the likely resumption of negotiations and at least a temporary halt to Russian fire against Ukraine. However, market volatility remains high, with the global news background not conducive to predictability and stabilization.
Overview of currency dynamics and forecast
US dollar exchange rate: dynamics and analysis
In May, the dollar continued to trade in a relatively narrow range against the hryvnia, showing slight volatility and stable demand. The hryvnia gradually strengthened at the beginning of the month.
The exchange rate in the cash segment remained within the range of UAH 41.00–41.90/USD over the last four weeks, peaking on April 30, when the average selling rate in banks reached UAH 41.89/USD and the buying rate reached UAH 41.21/USD. This movement was fully synchronized with the official NBU exchange rate, indicating that the regulator’s policy is in line with market realities.
At the same time, average spreads between buying and selling rates remain stable (within 60–70 kopecks), without significant expansion, confirming the balance in the currency market and sufficient competition among its operators, particularly in the cash segment.
On the interbank market, the volume of foreign exchange transactions decreased, but the NBU’s interventions also declined, which suggests that the market is partially self-balancing without excessive involvement of the regulator.
Technical and psychological support for the market is provided by the growth of international reserves to $46.7 billion (+10% in April), which creates an additional buffer for the “managed flexibility” policy.
At the global level, the dollar remains under pressure due to fears of stagflation in the US economy. The Fed’s unchanged rate and Jerome Powell’s statement that there are no sufficient grounds for a rate cut in the near future are holding back the dollar’s decline, but are not creating preconditions for its strengthening. This situation does not create strong external pressure on the hryvnia exchange rate.
Forecast for the near term:
Ø Short term (2–4 weeks): the exchange rate will remain within the range of 41.20–41.80 UAH/USD with local fluctuations of ±20 kopecks under the influence of situational factors, provided that the current circumstances remain unchanged.
Ø Medium term (2–4 months): the exchange rate may remain stable or shift to 41.80–42.50 UAH/USD under the influence of moderate devaluation. The stabilization of the security situation could become a serious psychological factor influencing the market, driving consumption and stimulating business recovery.
Ø Long term (6+ months): the trend towards a slow devaluation of the hryvnia remains, as do its underlying factors, especially given the projected decline in international aid in 2026 and the increase in the budgetary burden. The target range is UAH 43.00–45.00/EUR in the event of the least favorable scenario.
Euro exchange rate
The euro exchange rate against the hryvnia in April and the first ten days of May showed a clearly volatile trajectory. Starting from April 15, the euro rose steadily, reaching a peak of 48.14 UAH/EUR at the end of April. This was the highest level in the last six months. After that, the market began to correct itself, and by mid-May, the euro had fallen back to 47.10 UAH (selling) and 46.20 UAH (buying).
The spread between buying and selling rates in the cash segment narrowed from 2 UAH to 0.6-1 UAH by mid-May, which is an important indicator of a decrease in nervousness and unpredictability of the exchange rate, as a result of which market operators stopped including increased risk and agitation premiums in their quotations.
Currently, market operators are still leaving themselves room for maneuver in anticipation of further fluctuations in the euro, as indicated by the slight lag of the official exchange rate behind real market quotations. The spread between the euro’s buying and selling rates is roughly equal to the NBU rate at 30-40 kopecks, which, if the trend continues, may indicate that currency market operators in all segments expect the euro to fall in the coming weeks.
The slowdown in the US economy, high uncertainty in negotiations on international customs agreements, volatility in the stock and commodity markets, and the rhetoric of the Fed all play in favor of the euro as a relatively stable alternative to the dollar, both globally and locally in Ukraine.
Forecast
Recommendations for businesses and investors
In light of the growth of the NBU’s reserves, the decline in consumer inflation, the stabilization of the dollar market, and the continued volatility of the euro/hryvnia pair, currency risk management strategies should be reviewed.
1. Liquidity is paramount.
The coming months will remain a period of controlled volatility. The primary task is to ensure quick access to foreign currency funds in any scenario. Long-term deposits, illiquid assets, and single currency exposure increase risks. All instruments should be subject to prompt review or withdrawal.
2. Adjust the share of the euro.
After rapid growth and peak values at the end of April, the euro entered a correction phase. The potential for growth remains in the medium term, but now is not the time for active position building. New exchange rate impulses should be closely monitored to avoid risks and choose the right moment for new transactions.
3. Currency interventions are a marker of stability.
The volume of NBU interventions is a sign of the market’s ability to self-regulate and maintain balance. Focus on exchange rate ranges without emotional reactions to news: the market is becoming less responsive to isolated information leaks and has developed a certain immunity to them.
4. Do not stick to fixed currency “rules.”
The hryvnia remains at risk of devaluation, but in the short term, the exchange rate is stable. This is not a reason to get rid of dollars, but it is also not a reason to buy currency en masse. Switch to scenario planning: 3–4 alternative scenarios with adaptive asset allocation for each of them.
5. Be cautious in short-term speculation.
Especially in the EUR/UAH pair. Even if the euro falls to 47 UAH, the margin is too small for comfortable trading. The potential return does not match the market risks without precise timing and liquidity. Most players are better off refraining from short bets.
6. Control the share of hryvnia.
Despite the stability, it is not worth accumulating excess hryvnia liquidity. Anything above the functional amount should be immediately transferred to instruments with a fixed exchange rate (for example, to a multi-currency structure or reserve).
7. Monitoring spreads is a new skill.
In the euro market, it is spreads, not absolute exchange rates, that have become the main indicator of nervousness and expectations among operators in recent weeks. They are more useful for forecasting than the exchange rate itself. In the event of a sharp expansion, it is better not to enter the currency, and in the event of a contraction, you should look for a comfort zone for placements or short maneuvers.
This material has been prepared by the company’s analysts and reflects their expert, analytical, and professional judgment. The information presented in this review is for informational purposes only and should not be considered a recommendation for action.
The company and its analysts make no representations and assume no responsibility for any consequences arising from the use of this information.
All information is provided “as is,” without any additional guarantees of completeness, timeliness, or updating or supplementation. Users of this material should independently assess the risks and make informed decisions based on their own assessment and analysis of the situation from various available sources that they themselves consider sufficiently qualified.
Before making any investment decisions, we recommend consulting with an independent financial advisor.
REFERENCE
KYT Group is an international multi-service FinTech company that has been successfully operating in the non-bank 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 included in the list of the largest taxpayers, and is one of the industry leaders in terms of asset growth and equity capital.
More than 90 branches in 16 major cities of Ukraine are located in convenient locations for customers and are equipped with modern equipment for the convenience, security, and confidentiality of each transaction.
The company’s activities comply with the regulatory requirements of the National Bank of Ukraine. KYТ Group adheres to EU standards of operation, with branches in Poland and plans for cross-border expansion into other European countries.
Issue No. 2 – April 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 look at current conditions, market dynamics, key influencing factors, and likely scenarios.
Analysis of the current situation
At the end of April, Ukraine’s currency market showed that the main trends observed in the first half of the month remained unchanged: relative stability in the US dollar segment and continued strengthening of the euro against the hryvnia.
The key differences in April’s dynamics were a shift in the balance of supply and demand in favor of the hryvnia, a decrease in average daily demand for currency from the population, and smoother market behavior against a backdrop of moderate inflation and continued external support.
Key drivers:
Ø The dollar exchange rate remains stable with a moderate tendency to appreciate in favor of the hryvnia amid excess cash supply and global weakening of the dollar.
Ø The euro continues to appreciate under the influence of global processes, trade conflicts, and attempts by the new US administration to exert direct verbal pressure on the Fed, while demand for the euro continues to grow in Ukraine.
Ø The overall state of the currency market is characterized by high liquidity and low volatility in the dollar segment, while the euro segment is showing nervous growth with clear signs of speculative activity.
Domestic factors
Ø The National Bank of Ukraine maintains a policy of soft flexibility, keeping the discount rate unchanged and controlling the official exchange rate. The spread between the official and market exchange rates of the dollar remains minimal, while in the euro segment it is widening.
Ø Household activity in the cash market has been declining for the third month in a row: average daily demand fell from $41 million in February to $17 million in April. This indicates a decline in panic sentiment, market saturation, and/or the exhaustion of household purchasing power amid weak economic growth. Another factor could be the spring holiday cycle, which is a traditional period for selling foreign currency savings to celebrate and finance short-term vacations.
Ø At the same time, structural tensions remain, with imports exceeding exports by a factor of two, which remains a factor in the “washout” of foreign currency liquidity from the country. However, at the current stage, this can be fully offset by international assistance, which is expected to cover Ukraine’s foreign currency needs.
Ø The National Bank claims to have stable control over inflation expectations. Although March inflation peaks at around 15-16% annually, it is expected to decline to 8.7% year-on-year in the summer months, which, combined with the summer slowdown in business activity, will help reduce the population’s focus on currency. As a result, this may reduce the speculative motivation of currency market operators.
External factors
Ø At the global level, the main source of turbulence remains the trade wars initiated by the Trump administration, which have increased the risks of deglobalization and a weakening of the dollar due to its declining role as a reserve and settlement asset.
Ø This uncertainty is pushing global investors to invest or hedge through safe-haven assets such as gold, the Swiss franc, the Japanese yen, and the euro, which is currently capable of acting as a stabilizer.
Ø Additional pressure on the dollar came from Donald Trump’s open demand that the US Federal Reserve immediately lower its key interest rate, which created the risk of reducing the Fed’s independence and triggered a decline in bond yields and a fall in the US currency to its lowest level in six months.
General conclusions:
Ø The hryvnia remains stable despite external pressure and internal imbalances. Thanks to regular financing of the budget deficit and financial assistance from foreign partners, the market remains balanced.
Ø The dollar will remain in a narrow range, while the euro will continue to grow, maintaining high volatility.
Ø The cash currency market is in a phase of saturation, and the decline in demand for currency gives grounds to speak of relative market predictability.
Ø Speculative risks in the EUR/UAH pair are increasing — businesses should take into account possible short-term declines or impulsive jumps when planning operations.
Overview of dynamics and forecast of exchange rates
US dollar exchange rate
The dollar exchange rate against the hryvnia remains within a stable narrow corridor — from 41.10 to 41.80 UAH/USD with minimal volatility. In April, the market showed synchronization between the market and official exchange rates, which reduces risks for businesses and consumers. Revaluation pressure is intensifying amid declining demand from the population and increased supply of dollars.
During the second half of April, the dollar exchange rate remained stable, without sharp fluctuations. The lowest values were observed within the range of 41.10–41.35 UAH/USD for purchases, while sales remained within the range of 41.57–41.85 UAH/USD throughout the entire period.
Our short-term forecast for the dollar exchange rate, provided in the previous review, was fully confirmed within standard market deviations. The exchange rate dynamics in the dollar segment indicate high current predictability of the domestic market.
A distinctive feature of the period was the gradual smoothing and narrowing of the spread between buying and selling rates, indicating an increase in currency liquidity and a reduction in tension in the cash market. Other notable features of the second half of April included the movement of market exchange rates in line with the official NBU rate and with an almost equal spread between buying and selling rates. This indicates the effectiveness of the National Bank’s policy of smoothing out situational fluctuations, which reduces volatility and contributes to the formation of stable expectations among market participants.
Global factors also support the stability of the dollar in Ukraine — despite the weakening of the dollar on world markets, these processes are not being transmitted to domestic risks thanks to currency reserves and the flexibility of the NBU’s policy. Global processes have not created new pressure on the hryvnia, but in the medium term they may become a driver of capital outflows from Ukrainians and businesses from the dollar.
Forecast for the near term:
Euro
In the second half of April, the euro continued to rise against the hryvnia, confirming the previously observed upward trend. As we predicted in our previous review, market quotes confidently crossed the 47 UAH/EUR mark, and by the end of April, the average cash euro exchange rate consolidated at 48.00 UAH/EUR, This allowed domestic Ukrainian investors in euros to receive an exchange rate premium of 1.6 to 2.4 UAH per euro from the beginning of the month to the end of April.
Particular attention should be paid to the change in the spread between buying and selling rates. While at the beginning of the month the spread remained within 60–70 kopecks, by the end of April it exceeded 1 UAH for a number of cash currency market operators and reached 1.3–1.5 UAH for some operators. This is a sign of growing market nervousness and heightened expectations of further volatility. Market operators are trying to factor into prices the risks of a possible further strengthening of the euro or a correction amid speculative activity.
Another important signal is the significant difference between market rates and the official NBU rate. The euro exchange rate set by the regulator lags behind market values by an average of 30–50 kopecks, which is an indicator that the market is responding more quickly and flexibly to global currency trends, in particular the strengthening of the euro against the US dollar. The official dynamics are moving by inertia, while currency market operators are already factoring expectations of further changes into their quotes.
This lead indicates a growth in the premium for holding euros, which are increasingly being used not only as a means of payment but also as a savings instrument and, in some cases, as an attempt to profit from global turbulence.
Forecast:
Recommendations for businesses and investors
The dynamic situation on the markets prompts us to maintain our approach of dividing our recommendations into two separate blocks:
Ø basic recommendations — will help you avoid currency risks or minimize losses;
Ø updated recommendations — will help you navigate the revision of your investment and savings strategies.
Basic recommendations that remain relevant
Diversification of the currency portfolio is a basic strategy.
The euro is showing volatility and growth potential, while the dollar is weak against the backdrop of global events. It is recommended to keep part of your assets in euros, especially if you have corresponding liabilities. The dollar is a short-term liquidity and hedging tool.
Maximum liquidity is an unconditional priority.
All your currencies should be easily accessible for quick maneuvering — this is key given the global turbulence and political risks.
Keep the hryvnia in functional amounts.
The hryvnia remains stable, but the inflationary background and potential exchange rate risks in Q2–Q3 2025 do not allow for large hryvnia surpluses. If possible, avoid tying hryvnia liquidity in instruments with fixed terms or without the possibility of revising the yield.
Updated and supplemented recommendations
Change in currency share in the portfolio: smooth migration from the dollar to the euro
It is advisable to gradually rebalance the portfolio towards the euro. It is increasingly used in settlements and potentially offers a better exchange rate premium. However, turbulence in international currency markets requires constant monitoring of significant news and events, while not succumbing to the influence of sensational headlines and herd behavior. Only investors with nerves of steel, a cool head, and a clear strategy will emerge from the currency storm with profits or minimal losses.
Have a margin of safety and hedge your risks
Build buffers for forward exchange rate fluctuations: despite the upward trend of the euro and the downward trend of the dollar in the short term, there are “dips” and “bumps” in this pair and in relation to the hryvnia, which can cause losses or unexpected expenses.
Pay close attention to spreads — they are an indicator of market sentiment and a trend forecast
A widening spread on the euro is a signal that the market is nervous and expecting changes. At such times, it is better to avoid speculation and not make decisions under the influence of emotions. For experienced currency speculators, this is an excellent field and a good time for productive maneuvering, but for everyone else, there are risks of losses. The same applies to the dollar — reduce your focus on exchange rates and analyze spreads.
Scenario planning and regular reassessment
The market will continue to be turbulent for an indefinite period of time. Have alternative scenarios for currency behavior, especially for Q3–Q4, when a new devaluation cycle is most likely to begin.
This material has been prepared by the company’s analysts 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 responsibility for any consequences arising from the use of this information. All information is provided “as is,” without any additional guarantees of completeness, timeliness, or updates or additions.
Users of this material should independently assess the risks and make informed decisions based on their own assessment and analysis of the situation from various available sources that they themselves consider sufficiently qualified. Before making any investment decisions, we recommend consulting with an independent financial advisor.
REFERENCE
KYT Group is an international multi-service FinTech company that has been successfully operating in the non-bank 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 included in the list of the largest taxpayers, and is one of the industry leaders in terms of asset growth and equity capital.
More than 90 branches in 16 major cities of Ukraine are located in convenient locations for customers and are equipped with 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 of operation, with branches in Poland and plans for cross-border expansion into European countries.
