Business news from Ukraine

Issue No. 1 – February 2026

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 current data. We consider the current conditions, market dynamics, key influencing factors, and likely scenarios.

Analysis of the current situation on the currency market

International context

After the Fed left its key rate unchanged at the end of January, the number of forecasts for the rate to remain at its current level for the next few months increased in the US. The Bureau of Labor Statistics reported that non-farm payrolls in the US rose by 130,000 in January, while the unemployment rate fell from 4.4% to 4.3%. This indicates that interest rates are likely to remain unchanged, because if the labor market is improving, there are no fears of a market slowdown, which was a significant reason for the Fed to cut rates last year.

Recall that at the end of January, the Fed Committee left the central bank’s base interest rate in the range of 3.50-3.75% after lowering it at each of the last three meetings in 2025. Moreover, the higher-than-expected job growth in January may give the Fed confidence that the labor market is stabilizing and motivate the central bank to focus on controlling inflation, which remains above the Fed’s 2% target. The US consumer price index rose 0.3% month-on-month and 2.7% year-on-year in December last year, which is stable compared to November 2025.

As for the economy, US GDP grew by 4.4% year-on-year in the third quarter, and this pace is expected to slow slightly during 2026, but still exceed 2%. Some economists believe that the next Fed rate cut is unlikely before mid-June 2026. However, everything will depend on labor market indicators and inflation rates in the US. Interestingly, according to media reports, in his five speeches on the economy since December, Donald Trump has claimed that inflation has been overcome and prices have fallen almost 30 times, which, of course, contradicts the actual economic data.

As for the EUR/USD pair, during the first half of February, the dollar managed to strengthen slightly compared to January, reaching 1.1874. This was facilitated by both the Fed’s decision to leave the rate unchanged and the optimistic US labor market indicators and investors’ hopes that inflation would not exceed the forecast for this year. However, there is no certainty about the Fed’s future policy, and some analysts have already suggested that the Fed may start cutting rates more aggressively, causing the dollar to fall by 10% during 2026. Among the risk factors that will affect the dollar is the change in the Fed’s leadership, as many believe that the successor to current Chairman Jerome Powell will face pressure from President Donald Trump to lower borrowing costs, leading to several rate cuts in 2026.

Meanwhile, in Europe, the ECB is keeping key rates unchanged, and most economists say the central bank will stick to this policy throughout 2026. The fact is that inflation in the eurozone is considered to be under control, although there are risks of a decline amid the strengthening of the euro. With interest rates already low at 2% and inflation hovering around the ECB’s 2% target, the ECB is in no hurry to change its monetary policy. The strong euro is not particularly pleasing to Europeans, as it makes imports cheaper for buyers in the eurozone, which affects inflation, and further strengthening of the euro could potentially require changes in rates. However, the EU is currently stable, and the economy is performing even better than expected: GDP in the fourth quarter of 2025 grew by 0.3% compared to the previous quarter, exceeding Bloomberg’s consensus forecast by 0.2%.

Internal Ukrainian context

In the first half of February, there was no stress on the Ukrainian currency market, and the hryvnia depreciated insignificantly against the US dollar: at the beginning of the month, the official exchange rate was 42.84 UAH/USD, and at the end of the second week of February, it was 43.03 UAH/USD. The slow fluctuation was traditionally facilitated by NBU interventions: since the beginning of January, according to official NBU data, the regulator has injected more than $4.33 billion into the market.

Inflation rates in Ukraine are declining. The NBU forecasts that inflation will be 7.5% at the end of 2026 and will remain close to the 5% target in the future, reaching it in 2028. The economy will grow by 1.8% in 2026, and in the following years, the recovery will accelerate to 3-4% per year. National Bank experts believe that inflation will decline in the coming months, primarily due to the residual effects of crop growth in 2025. At the same time, the consequences of large-scale destruction in the energy sector will put pressure on prices through both market and administrative mechanisms.

The NBU’s Inflation Report for January 2026 states that international aid will be sufficient to finance the budget deficit without resorting to debt issuance. The NBU has left its assumption regarding the budget deficit in 2026 unchanged at around 19% of GDP, which is in line with the State Budget Law. The NBU assumes that Ukraine will receive $51.4 billion from international partners in 2026, $42.7 billion in 2027, and $21.6 billion in 2028. This will allow international reserves to be maintained at a sufficient level to support the stability of the currency market. The main hopes for supporting the state budget this year are linked to the EU Council’s decision to allocate €90 billion to Ukraine in 2026 and 2027, as well as the current ERA Loans mechanism.

As of early February, Ukraine’s international reserves had grown to $57.66 billion. According to the National Bank, in January, they increased by $357.8 million compared to December, primarily due to external financing, which offset the National Bank’s net currency sales and the country’s debt payments in foreign currency. The current volume of international reserves provides financing for six months of future imports.

US dollar exchange rate: dynamics and analysis

General characteristics of market behavior

During the first half of February, the US dollar strengthened on the Ukrainian currency market. At the beginning of the month, the interbank exchange rate was at 42.9 UAH/USD, and on February 12, it was already at 43.05 UAH/USD.

On the cash market, there were slight devaluation fluctuations between February 1 and 13, and the purchase rate in mid-February reached a range of 42.59–42.85 UAH/USD, while the sale rate remained within 43.15–43.4 UAH/USD. Meanwhile, at bank cash desks and exchange offices, the spread between the buying and selling rates changed only slightly compared to January, amounting to 0.5–0.6 UAH/USD.

Key influencing factors

· International context. The dollar began to strengthen against the euro due to growing investor optimism about inflation and the apparent trend toward improvement in the labor market, which promises predictable Fed policy and no sharp changes in rates in the near future.

· International reserves are at a high level: as of early February 2026, they reached USD 57.66 billion.

· The National Bank supports the currency market with regular interventions: the interbank exchange rate is gradually weakening without any sharp movements, and since the beginning of the year, the NBU has injected more than $4.33 billion into the market.

Forecast

· Short term (1–2 weeks): base range of 43.3–43.8 UAH/USD with possible fluctuations towards a weaker hryvnia.

· Medium term (2–3 months): 43.50–44.60 UAH/USD. The dollar is expected to gradually strengthen on the international market due to the stabilization of the labor market and decent macroeconomic data, as well as the absence of sharp changes in the Fed’s policy on the base rate. In Ukraine, the hryvnia exchange rate will be influenced by the level of demand for currency on the interbank market, which may increase in February–March, in particular due to another series of massive enemy attacks on energy facilities, which will lead to the need to purchase expensive imported equipment. The exchange rate will also be influenced by the situation on the front lines and political statements and forecasts regarding the possible end of the full-scale war.

· Long term (6+ months): a gradual devaluation of the hryvnia against the dollar is expected, as well as regular and large-scale support for the market through currency interventions by the NBU. The benchmark for the first half of 2026 is 43.5–44.95 UAH/$.

Euro exchange rate: dynamics and analysis

General characteristics of market behavior

During the first half of February, the euro fluctuated on the Ukrainian market: initially, the hryvnia strengthened against the euro, and the official euro exchange rate at the beginning of February was 51.24 UAH/EUR, and five days later it was already 50.89 UAH/EUR. However, in the middle of the month, the euro began to strengthen and reached 51.20 UAH/EUR. In the cash segment, the euro also fell in January. While at the beginning of February, the euro purchase rate in banks and exchange offices was 51 UAH/EUR, and the sale rate was 51.95 UAH/EUR, in mid-February, the purchase rate was 50.8 UAH/EUR, and the sale rate was 51.45 UAH/EUR.

Key observations

· Exchange rate geometry: The selling rate for cash euros in mid-February 2026 is at the level of 51.29–51.50 UAH/EUR.

The dynamics of the euro exchange rate were influenced by the strengthening of the dollar on the international market, as well as the narrowing of the spread between the buying and selling rates to 0.2–0.4 UAH/EUR.

· Supply and demand: Demand for the euro fell slightly on the interbank market in February 2026, and demand for the euro also declined on the cash market in Ukraine. Between February 10 and 12 alone, the euro exchange rate on the interbank market fell from 51.37 UAH/EUR to 51.03 UAH/EUR.

Key influencing factors

· Global context: The euro is falling against the US dollar, which is strengthening in February amid optimistic forecasts for the development of the US economy.

· Domestic market: the euro continues to follow the dollar in the direction of strengthening, but the pace of the euro’s strengthening is currently quite limited, which is explained, in particular, by the relatively low level of demand.

· Behavioral factor: in Ukraine, there is no rush demand for the euro in mid-February, and spreads between exchange rates are steadily narrowing. However, everything may change if the recent massive shelling of energy infrastructure leads to an increase in the need to purchase equipment in the EU for euros, which will play on the growth in demand and, accordingly, lead to new exchange rate jumps.

Forecast

· Short term (1–2 weeks): the euro on the interbank market will remain in the range of 51.2–51.8 UAH/€ with a tendency to move towards the upper limit.

· Medium term (2–3 months): no significant strengthening of the dollar is expected on the international market, so the euro will remain strong. In Ukraine, the euro exchange rate will be influenced by demand for the euro due to the need to import from the EU, but relatively low demand on the cash market will not allow the euro exchange rate to deviate significantly from the interbank market.

The exchange rate benchmark is 51.6–54.5 UAH/EUR.

· Long term (6+ months): the euro may rise to 54.8–56.5 UAH/EUR in the first half of 2026.

Recommendations: dollar or euro — buy, sell, or wait?

USD/UAH

The dollar is strengthening on the international market thanks to optimistic expectations and updated data on the labor market and inflation, which showed stable development of the US economy and a reduction in risks. However, “black swans” in the form of a change in the Fed’s leadership and further pressure from Donald Trump on the central bank to implement a significant reduction in rates during 2026 cannot be ruled out.

Overall, the dollar looks quite vulnerable, given the unpredictability of President Trump’s policies and possible new tariff surprises from the US. However, positive sentiment prevails for now, which is reflected in the value of defensive assets.

In Ukraine, the hryvnia is under strong pressure from increased demand for foreign currency, and economic risks associated with the war, destroyed energy infrastructure, and the lack of even partial predictability of further developments in the hostilities do not give the national currency much room for strengthening. Building up savings in dollars will remain the basis for investors throughout 2026 as part of both medium- and long-term strategies. The expected weakening of the hryvnia exchange rate only adds to the appeal of accumulating dollars. Speculative income can be obtained both from fluctuations in the hryvnia against the dollar and from frequent and irregular fluctuations in the euro exchange rate.

EUR/UAH

The euro has been losing ground in recent weeks, but this is not a signal to exit euro savings, as the main forecasts for 2026 are still linked to the strengthening of the euro, although significant fluctuations cannot be ruled out. It is precisely these fluctuations that will allow investors to profitably enter into investments in euros and also exit them with a profit, especially when it comes to a medium-term strategy. The liquidity of the euro will remain high thanks to the stable development of the eurozone economy and the ECB’s predictable conservative strategy.

Overall strategy

The Federal Reserve is not currently planning any changes to the base rate, which was left unchanged at the last meeting at the end of January.

Optimistic sentiments about the active development of the US economy are motivating investors to return to dollar assets, and the dollar’s exchange rate against the euro is gradually strengthening. However, the temporary stability is fragile, and further fluctuations in the other direction are possible in the near future. Unlike the US, the EU economy is moving slowly but surely towards growth, and inflation in the eurozone is more controlled and predictable. All this gives reason to expect uneven and multidirectional fluctuations in the dollar exchange rate in the coming months.

Ukraine has accumulated a large amount of international reserves, sufficient for six months of imports, and has planned amounts of aid from partner countries, which are positive factors that may somewhat curb the devaluation trend. However, in the long term, the hryvnia will weaken in 2026 due to the ongoing war of attrition, problems with the state budget deficit, and negative investor expectations regarding the economic situation. Nevertheless, the pace of devaluation will be controlled by the NBU, which will remain the main player in the currency market. The NBU will carry out currency interventions to the extent necessary to meet demand and prevent sharp fluctuations in the exchange rate. In this situation, investors should focus on their own currency strategies, planning to buy dollars and euros in a timely manner, which will be the base currencies of their portfolios and will allow them to carry out profitable currency exchange transactions at any convenient time.

This material has been prepared by analysts at KYT Group, an international multi-service FinTech platform, and reflects their expert, analytical, and professional judgment. The information presented in this review is for informational purposes only and should not be construed as a recommendation for action.

The company and its analysts make no representations and assume no responsibility for any consequences arising from the use of this information. All information is provided “as is” without any additional guarantees of completeness, obligations of 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 marketplace platform that provides financial companies with access to services for promoting their services, as well as advertising and consulting services.

Issue #2 – January 2026

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 currency market

International context

The main event of the second half of January 2026 was the expected meeting of the Federal Reserve Committee, which considered the level of the key policy rate. As a result, as expected by the markets, the Fed left the benchmark interest rate unchanged, and the federal funds rate remains in the current range of 3.5% to 3.75%. The last meeting of the Fed Committee actually marked the beginning of a pause after three consecutive rate cuts in 2025. Currently, the situation in the US economy does not look pessimistic, as GDP growth in the third quarter reached 4.4%, which significantly exceeded forecasts. Nevertheless, the Fed needs to keep the situation under control, as worrisome trends could become “black swans” for the US economy in 2026. We are talking about a weakening labor market and an inflation rate that exceeds the 2% target.

As for the EUR/USD pair, the dollar continued to fall against the euro in January and even reached the level of 1.2038 by the end of the month, although later there was a slight pullback to 1.1930. Thus, analysts noted that the US dollar fell to its lowest level in four years at the end of January 2026, and this happened after US President Donald Trump dismissed fears of a fall in the US currency. When asked by journalists whether he was concerned about the currency’s decline, he replied: “I think the value of the dollar – look at the business we do. The dollar is doing great.” This statement sent the dollar tumbling, as it caused investors to rush toward traditional investment havens that include gold and the Swiss franc.

While the dollar is losing, the euro is strengthening. The single European currency has strengthened by 15% over the past year. Among the reasons are the instability of Donald Trump’s policies, the Trump administration’s economic decisions on tariffs, and threats to further US economic growth. Of course, Donald Trump’s latest statements on Greenland also add fuel to the fire of the dollar’s decline.

The EU itself is not too happy about the strong euro, as it makes European exports less competitive. Thus, the current trend of strengthening the euro is unlikely to be beneficial for the development of the EU economy. Some experts even predict that the eurozone’s GDP will be about 0.2% lower by the end of the year if the euro/dollar exchange rate remains at the current level, rather than at about $1.16, which has been the benchmark since the EU-US trade agreement in late July. As for whether the European Central Bank will take any action, no one is sure yet. The next ECB meeting in early February should provide some guidance and show whether Europe is ready to change the vector of monetary policy.

Domestic Ukrainian context

In January, the Ukrainian currency market was really stormy, and devaluation processes accelerated, with a particular surge in the middle of the month, when the official exchange rate reached UAH 43.39 per dollar. However, the NBU’s interventions played an important role in reversing the fluctuations, and as of January 30, the official exchange rate was set at UAH 42.84 per dollar.

In January, the NBU continued its policy of exchange rate flexibility, but increased interventions to cool down the high demand for foreign currency. In the first three weeks of January, the NBU sold USD 2.678 billion on the market, with the largest amount (over USD 1.06 billion) in the third week of the month. However, the peak level of demand observed in December, when the NBU sold more than $4.65 billion on the market, was not observed in January.

An important decision in January was to cut the NBU’s key policy rate. The Board of the National Bank of Ukraine decided to start a cycle of interest rate easing, and the rate was cut from 15.5% to 15% starting January 30, 2026. According to the NBU, this is consistent with bringing inflation to the 5% target on the policy horizon and will support the economy at the same time. In addition, the NBU informed that in December, both consumer and core inflation slowed to 8% year-on-year. They say that the annual growth rate of consumer prices also declined in January, but inflation expectations remained relatively high. According to the NBU’s forecast, inflation will decline to 6% at the end of 2027, and to the target of 5% in 2028.

As for foreign aid, the NBU says that the expected amount of foreign aid will be enough to finance the budget deficit without issuing new debt and to keep international reserves at a sufficient level to maintain the stability of the foreign exchange market. The NBU said in a statement that the EU Council has decided to allocate EUR 90 billion to Ukraine in 2026 and 2027, and that support for Ukraine will continue under the current ERA Loans mechanism. The NBU’s updated forecast suggests that international reserves will amount to USD 65 billion by the end of 2016. At the end of 2026, international reserves will amount to USD 65 billion.

Despite the NBU’s “reassurance” in the form of a rate cut and reminders from the regulator’s top officials about the upcoming multibillion-dollar financial support from partners, the FX market is still trying to follow the devaluation trend. There are many reasons for this: large-scale shelling of cities, which has significantly worsened the situation in the energy sector, the difficult situation at the front, and the lack of clear signals from the IMF regarding the approval of a new program worth $8.1 billion.

US dollar exchange rate: dynamics and analysis

General characteristics of market behavior

In the Ukrainian foreign exchange market in January, the dollar initially gained ground, but lost ground in the second half of the month as the hryvnia strengthened. At the beginning of the month, the interbank exchange rate was at UAH 42.3 per dollar, while on January 15 it was at UAH 43.55 per dollar, and on January 29 it was at UAH 42.9 per dollar.

The cash market experienced accelerated devaluation waves, and in mid-January the purchase rate reached 43-43.2 UAH/USD, while the sale rate was in the range of 43.6-43.7 UAH/USD, but at the end of the month, the strengthening of the hryvnia on the interbank market also affected the cash segment, where the purchase rate was 42.5-42.3 UAH/USD, and the sale rate was 43-43.15 UAH/USD.

Meanwhile, the spread between the buying and selling rates at bank cash desks and exchange offices increased to UAH 0.55-0.65 per dollar compared to December.

The cash market saw a surge in demand in January: according to the NBU, between January 1 and January 27, households purchased USD 1.64 billion (in equivalent), while sales of cash currency by households during this period amounted to USD 0.97 billion.

Key factors of influence

– International context. The dollar began to strengthen very actively against the euro as a result of the expected pause in the Fed’s interest rate cuts, as well as pessimistic expectations about the development of the US economy in 2026, including inflation and the labor market. Investor sentiment was also affected by President Donald Trump’s statements on the dollar’s strength and on Greenland.

– The National Bank of Ukraine cut its key policy rate to 15%, thus starting to ease monetary policy to bring inflation in Ukraine to the 5% target.

– The NBU increased interventions in the interbank market as part of its managed exchange rate flexibility strategy, which brought the dollar back below the psychological level of UAH 43/USD at the end of January.

Forecast.

– In the short term (1-2 weeks): the basic range of 42.9-43.4 UAH/$ with possible fluctuations towards a weaker hryvnia.

– Medium-term (2-3 months): UAH 43.50-44.00/$. In the international market, the weak dollar trend may change in the short term to return to last year’s exchange rate levels of approximately 1.17 EUR/USD. However, the inconsistent policies of President Donald Trump and the situation around the upcoming change of the Fed chairman and expectations of a new stage of easing in the US will send signals to investors about the long-term trajectory of the weak dollar. In Ukraine, the national currency will be influenced by the situation with the receipt of aid from partners, as well as the level of the energy crisis and the speed of its resolution. Demand on the interbank market will remain high.

– Longer term (6+ months): The scenario of gradual devaluation remains in place, and the NBU will periodically enter the market with more foreign currency supply to level out demand. The benchmark for the first half of 2026 is UAH 43.5-44.9/$.

Euro exchange rate: dynamics and analysis

General characteristics of market behavior

In January, the euro strengthened on the Ukrainian market: the official euro exchange rate stood at UAH 49.79/€ in early January and reached UAH 51.24/€ at the end of the month. In the cash segment, the euro also strengthened quite significantly in January: at the beginning of the month, the average buying rate was 49.5 UAH/€, and the selling rate was 50.17 UAH/€. By the end of the month, the euro was buying at 51 UAH/€ and selling at 51.95 UAH/€ in banks and exchange offices.

Key observations

– Exchange rate geometry: At the end of January, the selling rate for cash euros was at the level of 51.6-51.95 UAH/€. The dynamics of the euro exchange rate was influenced by the general devaluation trend, which intensified in the first two weeks of January 2026, as well as by the rapid and steady strengthening of the euro on the global market.

– Supply and demand: Demand for euros in early 2026 is at a high level as importers are actively purchasing energy equipment, the need for which has increased sharply after several massive Russian attacks targeting thermal power plants in large cities. On the cash market, demand for both dollars and euros grew during the month.

Key influencing factors

– Global context: the euro is strengthening against the dollar amid unstable forecasts for the US economy and political statements by Donald Trump, which affect investors’ desire to exit the dollar into safe-haven assets such as the euro, Swiss franc, and gold.

– Domestic market: On January 27, the euro crossed the psychological mark of 51 UAH/euro (official exchange rate), and in the cash segment is rapidly approaching the level of 52 UAH/euro, which stimulates demand for the European currency.

– Behavioral factor: In Ukraine, there has been an increase in both the volume of purchases of dollars and euros and the volume of currency sales, and the activity of currency exchange operations traditionally increases in difficult crisis periods. In January 2026, net purchases of foreign currency by households are likely to exceed December’s figures: the balance for January 1-27 is USD 693 million (December: USD 739 million).

Forecast.

– In the short term (1-2 weeks): the euro will be in the range of 51.5-51.9 UAH/€ with a tendency to move to the upper limit.

– Medium-term (2-3 months): the trend for a strong euro and, accordingly, a weak dollar may continue for some time in the international market. In Ukraine, in addition to the global trend of a stronger euro, the exchange rate will be affected by general devaluation sentiment due to high volumes of imports in euros, which will accelerate the euro’s growth. The exchange rate target is 51.8-53.5 UAH/€.

– Longer-term (6+ months): the euro may rise to 53.5-55.5 UAH/€ in the first half of 2026.

Recommendations: dollar or euro – buy, sell, or wait?

USD/UAH

The dollar’s weakening trend, caused by investors’ doubts about the prospects for the US economy and skeptical assessments of the labor market, is further reinforced by negative expectations about geopolitical risks (in particular, in the case of Greenland), a change in the Fed’s leadership, and concerns about the Fed’s independence.

Investors see the future policy of the Fed as another risk, as investors fear inconsistent steps and a lack of predictability as Donald Trump continues to put pressure on the Fed. This means that the dollar is unlikely to strengthen to 1.1650 in the near future, and large investors are looking for ways to redirect their investments from the dollar to other currencies and liquid assets.

Ukraine is currently experiencing a clear devaluation trend, which means that dollar-denominated savings will remain the main basis for investors’ medium- and long-term strategies. The next stages of hryvnia devaluation will only lead to some options for generating speculative income on currency exchange. However, the dollar remains the main savings currency for various investment plans.

EUR/UAH

In recent months, the euro has shown a strengthening trend, which allows investors planning to enter the dollar to do so profitably. Investors will also continue to buy euros to form part of their savings in this currency as part of a long-term strategy. As the liquidity of the euro is only improving, investors can expect to keep about 40% of their foreign currency savings in this currency.

Overall strategy

In January 2026, the Fed Committee meeting ended with the expected “nothing” – the rate was left at the current level. Pessimism about the future development of the US economy and uncertainty about clear and adequate steps by the Fed contribute to the dollar’s decline. But there are no “black swans” in the EU: the economy is growing, inflation risks are minimal, and in February the ECB may consider the situation in more detail and announce whether it is preparing to change rates.

In Ukraine, frosts, blackouts and devaluation sentiment prevail, and investors continue to formulate their savings plans with a view to the upcoming weakening of the hryvnia. The National Bank of Ukraine is closely monitoring the market and is ready to intervene in case of peak demand, while the managed exchange rate flexibility strategy will allow us to remain cautiously optimistic about the pace of further devaluation movements. Basic rules for investors: no sudden decisions, especially when there is panic on the interbank market. We analyze the general global trend together with the internal Ukrainian realities and only then decide whether to exit the currency or move from the dollar to other assets. It is important to regularly review your own savings programs in order to respond to trends in time and increase the level of return on investments in foreign currencies.

This material was prepared by analysts of the international multiservice FinTech product platform KYT Group 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 to update or supplement.

Users of this material should make their own risk assessment and informed decisions based on their own evaluation 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 marketplace FinTech product platform that provides financial companies with access to services for promoting their services, as well as advertising and consulting services.

Issue No. 1 – January 2026

The purpose of this review is to provide an analysis of the current situation on the Ukrainian currency market and forecast 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 currency market

International context

The beginning of 2026 brought bad news for Fed Chairman Jerome Powell as the US Department of Justice served him with a subpoena threatening criminal charges in connection with his testimony before the Senate Banking Committee in June 2025. This testimony partly concerned a multi-year project to renovate the Fed’s historic office buildings. Powell himself said that he considers such actions in the context of pressure on the Fed from Donald Trump. “The threat of criminal prosecution is a consequence of the Fed setting interest rates based on our best estimate of what will serve the public, not on the president’s preferences. The question is whether the Fed can continue to set interest rates based on data and economic conditions, or whether monetary policy will be guided by political pressure or intimidation,” Jerome Powell said in an official statement.

In December, the Fed cut interest rates by a quarter of a percentage point, the third consecutive rate cut in 2025. At the time, the main factor influencing the decision to cut rates was concern about the labor market. The Fed’s next interest rate vote will take place at a meeting on January 27-28. However, market participants do not expect any changes at the beginning of the year.

The Fed’s forecast calls for only one rate cut in 2026, but the market believes that there could be two rate cuts this year. The economic outlook, of course, complicates the Fed’s work. Inflation in the US is expected to remain high, and the labor market is expected to improve in 3-5 months.

Goldman Sachs Research notes that U.S. economic growth will accelerate to 2-2.5% in 2026 due to the reduced impact of tariffs, as well as tax cuts and easier financial conditions, unemployment will be just above 4.4%, and the Fed will cut rates in March and June. Thus, rates will be in the range of 3-3.25%. However, there are other forecasts, for example, JPMorgan expects the Fed to leave interest rates unchanged this year before raising them in the third quarter of 2027. In this case, rates will remain in the range of 3.5-3.75% in 2026.

As for the EUR/USD pair, while in December the dollar was weakening, in particular against the backdrop of the Fed’s rate cut, in mid-January the trajectory went in favor of a strong dollar, reaching 1.1635 EUR/USD, while at the end of December it was at 1.1772 EUR/USD. The dollar is currently maintaining its strong position thanks to strong US macroeconomic data and reduced concerns about the independence of the US Federal Reserve. The latest economic data from the US showed a greater-than-expected acceleration in producer prices and a good recovery in retail consumption in November. This allows the Fed to keep interest rates unchanged for now. Accordingly, this situation plays into the hands of the dollar, which has been steadily strengthening in mid-January.

Domestic Ukrainian context

The new year brought an acceleration of devaluation processes to the interbank foreign exchange market. While at the very beginning of January the official exchange rate was at 42.35 UAH/USD, on January 12, the exchange rate crossed the psychological mark of 43 UAH/USD and reached 43.07 UAH/USD. However, the dynamics did not stop there, and as of January 16, the official exchange rate was set at 43.39 UAH/USD.

The NBU has been actively supporting the market with interventions: in December, the NBU’s net sales of foreign currency on the interbank market reached a record $4.7 billion, and compared to November, the volume of the NBU’s foreign exchange interventions increased by $1.8 billion. The NBU itself explained this increase in foreign exchange interventions by the traditional seasonal factor of increased budget spending and business operations at the end of the year.

International reserves at the beginning of January 2026, according to preliminary data, amounted to $57,292.5 million. The NBU clarified that in December they increased by 4.6% compared to November due to receipts from international partners, which exceeded the NBU’s net sale of foreign currency and the country’s debt payments in foreign currency. In particular, the government’s foreign currency accounts at the NBU received USD 6.915 billion, of which the largest share was received from the EU under the Ukraine Facility (USD 2.69 billion) and USD 3.9 billion came through the World Bank’s accounts. In total, Ukraine’s international reserves increased by 30.8% in 2025, and the current amount provides financing for 5.9 months of future imports.

The NBU’s key policy rate remains unchanged at 15.5% per annum. However, it is likely to be cut in 2026. The NBU reported that in December 2025, inflation continued to slow down to 8% year-on-year. Month-on-month, prices rose by 0.2%. Thus, actual inflation in December 2025 was lower than the NBU’s forecast, which says that inflation is expected to slow further in 2026, in particular due to a gradual reduction in labor market imbalances, moderate external price pressures, and the NBU’s monetary policy measures. Thus, there remains a high probability that the NBU will decide to cut the key policy rate.

An important issue remains the receipt of international aid in 2026. Earlier, the government and the NBU pointed to the need for external financing at USD 45 billion, most of which is the Ukraine Facility program and funds under the ERA mechanism (a loan secured by the proceeds of frozen Russian assets). On January 14, the European Commission presented a package of legislative proposals that would allow Ukraine to receive the previously approved €90 billion loan in 2026 and 2027. According to the EU, approximately €60 billion will be used for military aid, and another €30 billion for general budget support. By the way, these 30 billion euros will be provided subject to the reforms to be implemented in Ukraine: the European Commission has already noted that in order to receive them, Ukraine needs to implement reforms to improve democratic processes, the rule of law and the fight against corruption.

US dollar exchange rate: dynamics and analysis

General characteristics of market behavior

During the first half of January, the dollar was strengthening on the Ukrainian foreign exchange market. Thus, while at the beginning of the month the interbank exchange rate was at UAH 42.3/USD, on January 15 it was already at UAH 43.55/USD.

Devaluation fluctuations were expected to be faster in the cash market, where the purchase rate in mid-January reached a corridor of UAH 43-43.2 per dollar, and the sale rate was in the range of UAH 43.6-43.7 per dollar. Meanwhile, the spread between the buying and selling rates at bank cash desks and exchange offices remained unchanged compared to December, at UAH 0.4-0.6 per dollar.

Key factors of influence

– International context. The dollar began to strengthen against the euro as investors grew more confident that the Fed would maintain its independence and implement its planned base rate cuts in 2026.

– International reserves are at a high level: as of early January 2026, they reached USD 57.29 billion.

– The NBU has started a phase of controlled devaluation: the interbank exchange rate is steadily moving towards a weaker hryvnia. This is likely to help the government receive more state budget revenues from international aid received by the country in foreign currency.

Forecast.

– Short-term (1-2 weeks): base range of UAH 43.4-43.9 per USD with possible fluctuations towards a weaker hryvnia.

– Medium-term (2-3 months): 43.40-44.80 UAH/USD. The dollar may gradually strengthen in the international market due to the stabilization of the situation in the US in terms of macroeconomic indicators and the Fed’s clear and understandable steps to change the base rate. In Ukraine, the hryvnia will be affected by factors such as a significant deterioration in the energy sector as a result of massive shelling, the state budget deficit, the high need to increase imports of energy equipment, and planned foreign aid inflows under previously approved programs and new projects.

– Longer-term (6+ months): The hryvnia will devalue against the dollar, the NBU will be forced to increase interventions from time to time, but the trend toward a weaker national currency will dominate. The benchmark for the first half of 2026 is UAH 43.4-44.9 per dollar.

Euro exchange rate: dynamics and analysis

General characteristics of market behavior

The euro strengthened on the Ukrainian market during the first half of January: the official euro exchange rate was UAH 49.42/€ at the end of December and reached UAH 50.43/€ in mid-January.

Key observations

– Exchange rate geometry: In mid-January, the selling rate for cash euros was at 50.9 UAH/€. The dynamics of the euro exchange rate was influenced by the general devaluation trend, which intensified in the first two weeks of January 2026.

– Supply and demand: Demand for euros remains strong, especially amid high demand from importers to purchase energy equipment from sellers in the European Union. In the cash market, demand for both dollars and euros remains stable.

Key influencing factors

– Global context: the euro is reacting with a slight decline against the dollar due to the stabilization of the macroeconomic situation in the US and no changes in the Fed’s monetary policy, which supports the dollar.

– Domestic market: the euro crossed the psychological mark of 50 hryvnia per euro, and demand for the euro remains high both on the interbank market and in the cash segment.

– Behavioral factor: households continue to hold their savings in foreign currency, with both the share of dollars and euros in savings increasing. In December 2025, net purchases of foreign currency by households reached USD 739 million.

Forecast.

– In the short term (1-2 weeks), the euro will be in the range of 50.5-51.5 UAH/€ with the possibility of moving closer to the upper limit.

– Medium-term (2-3 months): the postponement of the next stage of monetary policy easing in the US will keep the trend of a strong dollar in the international market, but Ukraine will see a strengthening of the euro as a result of the general devaluation trend and high demand for the currency from businesses and households. The exchange rate target is 51.5-53.8 UAH/€.

– Longer-term (6+ months): the euro may rise to the level of UAH 54.0-57.0 per EUR in the first half of 2026.

Recommendations: dollar or euro – buy, sell, or wait?

USD/UAH

The strengthening of the dollar, which the markets have been pricing in as a result of optimism about the Fed’s monetary policy and expectations for updated US economic data, may be followed by the next stage of the US currency’s weakening due to geopolitical risks, a deteriorating US labor market, and investor concerns about the Fed’s independence.

The upcoming change of the Fed chairman and the markets’ doubts that the new head of the US central bank will continue the policy of the current leadership are a particular risk. This means that the dollar is unlikely to strengthen to 1.1450 in the near future. Meanwhile, the dollar remains the main reserve currency, which means that buying the dollar is advisable both in the long and short-term investment strategy.

In Ukraine, a steady devaluation trend is expected in 2026, which means that dollar savings will be the basis for investors, especially for a long-term currency strategy. If exchange rate fluctuations accelerate toward a stronger dollar, investors will be able to exit some of their dollar savings with a profit.

EUR/UAH

The euro is showing a steady upward trend in the Ukrainian market. This allows investors to plan their exit from this currency, provided that the benchmarks set out in their individual investment strategy are achieved. In order to diversify part of your savings, you should also consider buying tranches of euro currency at times of exchange rate stability. It is advisable to keep about 30-40% of your savings in euros, depending on the currency plan you choose.

Overall strategy

In January 2026, expectations of the next round of Fed key policy rate cuts and US inflation data will contribute to a weaker US currency. Meanwhile, the EU economy has stabilized, with the ECB reporting that inflation was 2.0% in December, economic activity remained stable, and the unemployment rate in the EU is close to a historic low. Compared to previous forecasts, EU economic growth was revised upward to above 1% this year and to 1.4% in the following years. All of this points to a low probability of rate changes in the EU in the near future, which will also support the euro.

As expectations of further hryvnia depreciation prevail in Ukraine, this allows investors to plan both a medium- and long-term strategy for building foreign currency savings, taking into account the strong positions of the dollar and euro. The main rule is that if short-term speculative transactions are required, the euro is the right currency. For long-term and medium-term investments, it is worth considering the US dollar as the underlying asset, which provides both low-risk investments and the possibility of receiving a stable profit. It is important to analyze not only the trends of the domestic currency market, but also the behavior of the EUR/USD currency pair on the global markets. This will allow you to revise your strategy in a timely manner and increase the level of return on foreign exchange investments.

This material has been prepared by analysts of the international multiservice product FinTech platform KYT Group 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 further warranty of completeness, obligation to be timely or to be updated or supplemented.

Users of this material should make their own risk assessment and informed decisions based on their own evaluation 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.

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