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.
Issue #2 – 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 on the Ukrainian currency market
In the second half of March, Ukraine’s FX market remained relatively stable, showing predictable local fluctuations in the dollar and a more pronounced, albeit predictable, strengthening of the euro. Both developments were primarily driven by external factors, as the domestic FX market remained balanced due to high cash liquidity and active actions by the NBU.
The NBU’s informal signal to banks to raise deposit rates after the key policy rate hike is a classic soft pressure from the NBU, which is trying to keep hryvnia instruments attractive. One by one, banks raised hryvnia rates, confirming that they understood the NBU’s signals, which should potentially reduce demand for foreign currency from the population and encourage at least short- and medium-term savings in hryvnia, easing pressure on the exchange rate.
International factors affecting the market:
Ø The US Federal Reserve has been pursuing a consistent policy of lowering its key policy rate for several months now, clearly implementing a cycle of easing. This reduces the attractiveness of the dollar as an asset for investors and stimulates the flow of capital into alternative currencies and assets.
Ø In contrast, the European Central Bank gave positive signals about the improvement of the economic situation in the eurozone, which pushed the euro to a significant increase.
Ø The global market witnessed a moderate weakening of the US dollar and a strengthening of the euro, which became the main driver of changes in the exchange rates of key currencies in Ukraine.
Internal factors that influenced the foreign exchange market:
Ø Increased supply of cash foreign currency: according to the NBU, in February 2025, banks imported more than $1.08 billion in cash foreign currency to Ukraine, of which $749 million was in US dollars and $330 million in euros. This is a decrease compared to January ($1.77 billion), but remains high historically, ensuring high foreign exchange liquidity and exchange rate stability.
Ø In the dynamics of currency imports by banks, there is a well-established trend of increasing the share of euros in the total volume. From 13% at the beginning of 2024, the share of euros increased to more than 30% in 2025, reflecting the growing demand for euros among households and businesses.
Ø Deviations of cash exchange rates from the official exchange rate remain insignificant, which indicates that the regulator’s currency policy is effectively coordinated with market realities.
Overview of exchange rate dynamics
US dollar exchange rate
Ø In the second half of March, the dollar exchange rate against the hryvnia remained in the range of UAH 41.30-41.80 per dollar.
Ø The lowest value was recorded around March 13, after which the exchange rate gradually recovered.
Ø The spread between the bid and ask rates narrowed to 30-40 kopiykas compared to 50-60 kopiykas in February, indicating high liquidity and stability of the market.
Ø The deviation of market rates from the official NBU exchange rate remained minimal (± UAH 0.3), which is an indicator of the stability of expectations and the NBU’s predictable policy on the foreign exchange market.
Euro exchange rate
USD exchange rate forecast
Ø In the short term (2-4 weeks), the dollar is likely to remain in the range of UAH 41.25-42.00/$. The main factors will be maintaining high cash liquidity, the US Federal Reserve’s restrained policy, and the NBU’s active presence on the interbank market. Narrowing spreads and stable deviations from the official exchange rate give reason to expect low volatility in this market segment.
Ø In the medium term (2-4 months), demand for foreign currency may moderately increase amid higher budget spending, a pickup in business imports, and the seasonal effect of spring asset regrouping. In this case, the dollar could move up to the range of UAH 41.80-42.50/$.
Ø In the longer term (6+ months), a significant depreciation trend may resume with the potential for a shift toward UAH 45.00/$.
This scenario will be influenced by the general inflationary background in Ukraine, fiscal expectations for the exchange rate (budget target is 45 UAH/$), and risks with financing the state’s needs.
Ø However, the global monetary policy factor will remain restraining: if the US Federal Reserve moves to easing, the pressure on the hryvnia will be offset by global stability or even a weakening of the dollar.
Euro exchange rate forecast
In theshort term (2-4 weeks), the euro may consolidate in the range of 44.80-45.70 UAH/€ after the ultra-fast growth recorded in mid-March.
A correction phase or sideways movement is expected, which is typical for markets after a sharp move.
In the medium term (2-4 months), the euro’s dynamics will depend on the ECB’s decisions on interest rates and incentives, the state of the eurozone economy, and global demand for risky assets. In the baseline scenario, the exchange rate may remain in the range of 44.50-46.00 UAH/€. In the event of new positive signals from the EU, a retest of the 46.50 UAH/EUR level is possible.
In the long-term horizon (6+ months), the euro is more stable than the dollar due to structural market expectations, a gradual increase in its role in savings, and its growing role in foreign trade.
The forecast range is 45.00-46.50 UAH/€ with the potential for appreciation in case of sustained macro growth in the euro area.
Recommendations for businesses and investors
1. Diversification remains the basic strategy in a situation where the euro shows increased volatility and the dollar shows signs of structural weakening.
If you have liabilities in euros, it is advisable to gradually increase the share of this currency, but the dollar should be left as a short-term liquidity or hedge instrument.
2. Monthly review of the structure of foreign currency assets is relevant in the context of the NBU’s flexible currency policy, changes in external demand and potential exchange rate dynamics, especially if some assets are denominated in a currency other than the main operating currency.
3. Cautious currency speculation – only if you have the skills. Despite periods of short-term exchange rate volatility, especially in the euro, the current market is more predictable for experienced players, but carries significant risks for beginners.
Speculative strategies are justified only for those who have the resources and time to constantly monitor the market and have access to quick transactions at favorable rates.
4. The hryvnia should be maintained at its functional level. The current situation does not pose a threat of rapid devaluation, but it is not advisable to keep excess hryvnia liquidity. It should be used only to cover short-term expenses and to form reserves for unforeseen events.
5. For the first time in almost a year of currency market reviews, we can recommend considering short-term hryvnia deposits for 1-4 months, a logical tactic for “temporary parking” of free funds without currency risk in the context of banks raising interest rates to ~15% per annum, which are now at least slightly ahead of official inflation. For the same reasons, a short-term “parking” of free hryvnia in government bonds can be considered. Longer-term hryvnia investments are risky given the likely acceleration of inflation and a possible exchange rate shift in the second half of 2025, which is most likely to occur in the fall of this year. Yields on foreign currency deposits remain symbolic and do not cover the risks of liquidity ties.
6. Maximum liquidity is a top priority: in the face of geopolitical and economic turbulence, all foreign currency assets should be available for operational maneuver.
This material was prepared by the company’s analysts and reflects their expert, analytical professional judgment. The information presented in this review is for informational purposes only and cannot be considered 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 make 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.
