Business news from Ukraine

Issue No. 1 – May 2026

Analysis of the current situation in Ukraine’s foreign exchange market

In May, volatility in Ukraine’s foreign exchange market decreased significantly, and the hryvnia strengthened. There was no high demand for foreign currency in April, and in May, no increase in interest in foreign currency was observed either in the interbank market or in the cash segment.

The state budget is being replenished thanks to large tranches from partners, which supports the currency market, although “black swans” in the form of short-term setbacks toward a weaker hryvnia cannot be ruled out. The National Bank of Ukraine, as the main market maker in the foreign exchange market, is keeping a close eye on the situation, so no unpredictable exchange rate spikes are expected in May. However, tensions in the foreign policy arena, oil market prices, and Ukraine’s relatively high demand for imported petroleum products will influence the exchange rate trajectory of both the dollar and the euro.

Global Context

At the end of April, the Federal Reserve Committee left the benchmark interest rate unchanged for the third consecutive meeting, citing heightened economic uncertainty due to events in the Middle East as the reason for this decision. The Committee’s next meeting will take place in mid-June. Currently, traders expect the Fed to be forced to raise rates as inflation in the U.S. rises. According to the latest report, the Consumer Price Index rose by 0.6% on a seasonally adjusted monthly basis in April, representing a 3.8% annual rate and the highest level since May 2023. Excluding food and energy, the core CPI rose by 0.4% and 2.8%, respectively, keeping inflation well above the Federal Reserve’s 2% target.

Overall, the U.S. economy, which is at war with Iran, is showing decent growth rates. U.S. gross domestic product reached 2% from January through March, according to the U.S. Department of Commerce. And although the figure is below the forecast of 2.3%, economic growth is still noticeable and is driven by steady consumer spending, a surge in business investment, increased exports, and government spending.

Tensions in the Middle East remain high, and the U.S. and Iran have yet to reach a common peaceful position. Moreover, as early as May, U.S. President Donald Trump criticized Iran’s latest peace proposal, calling it “unacceptable.” Meanwhile, the Strait of Hormuz remains blocked to oil tankers, which is significantly heating up the oil market and driving up prices. However, the price of Brent crude has since fallen from its peak levels (in April, prices rose to $120 per barrel), and as of May 14, market prices are in the range of $104.8–105.4 per barrel. Meanwhile, OPEC has released a new forecast, according to which global oil demand in 2026 will grow by a “robust” 1.2 million barrels per day (bpd). OPEC also believes that in 2027, global oil demand will grow by approximately 1.5 million barrels per day, which effectively represents an upward revision of about 200,000 barrels per day compared to OPEC’s forecast released in April.

Traditionally, the dollar is influenced by the Fed’s stable policy on the one hand and the destabilizing factors of the war in Iran and the oil storm on the other. However, the fluctuations do not follow panic-inducing trajectories, and the dollar is strengthening against the euro in May: by mid-month, the EUR/USD exchange rate stands at 1.1640.

Domestic Ukrainian Context

In the first half of May, demand for foreign currency on the Ukrainian currency market declined significantly. While the average weekly currency sales on the interbank market in April amounted to $817 million, the NBU sold $783.6 million on the market during the first week of May. The drop in demand and the NBU’s willingness to sell currency were the main factors influencing the exchange rate: the hryvnia strengthened. If we compare the exchange rate at the beginning of May and in the middle of the month, the rate has effectively remained unchanged—standing at 43.96 UAH per dollar.

In tandem with the interbank market, the cash market in May is also being influenced by weakened demand for dollars and euros. This trend has been ongoing since April, when, according to NBU data, the public purchased $1.22 billion in cash dollars—$325.8 million less than in March—while dollar sales decreased by $19.9 million to $1.49 billion. Overall, last month, purchases of foreign currency decreased by $598.8 million to $1.79 billion, while sales of foreign currency increased by $1.2 million to $1.42 billion.

As expected, international reserves declined in April: according to the NBU, preliminary data as of early May showed them at $48.21 billion. In April, reserves fell by 7.3%. According to the NBU, this trend is explained by the National Bank’s currency interventions and the country’s debt payments in foreign currency—the NBU sold $3.57 billion in April.

The foreign exchange market is being supported by financial aid from Ukraine’s partner countries. In April, Ukraine received the final tranche from the United Kingdom in the amount of 752 million pounds sterling (approximately $1 billion) under the G7 ERA initiative. The seventh tranche of aid to Ukraine through the Ukraine Facility mechanism is scheduled for June, amounting to 2.8 billion euros. Also in June, Ukraine may receive the first tranche under the 90-billion-euro loan program from the European Union. The state budget is expected to receive 3.2 billion euros as a result. There is a possibility that part of the funds under the IMF’s Extended Fund Facility program will also be received in June, with the tranche amounting to $686 million. However, final approval of the tranche is contingent upon the first review of the program, which is scheduled for June. Previously, the main issue hindering approval was tax policy, specifically the VAT for sole proprietors and the taxation of parcels.

US Dollar Exchange Rate: Trends and Analysis

In May, the foreign exchange market has been calm and stable, at least as demonstrated by the first half of the month. As of May 1, the official exchange rate was 43.96 UAH/USD; on May 8, the rate dropped slightly to 43.98 UAH/USD, and on May 14, it returned to 43.96 UAH/USD. As a reminder, the interbank rate at the end of April was within the range of 44.06–44.11 UAH per dollar, and in mid-May—within the range of 43.95–43.99 UAH/USD. The National Bank is fulfilling requests to buy currency, and no panic buying is observed.

The cash market, like the interbank market, has not shown any sharp fluctuations, as demand has significantly decreased. As of mid-May, the buying rate for cash dollars is 43.60–43.75 UAH/USD, and the selling rate is 44.15–44.30 UAH/USD. Spreads between rates in May remained unchanged at 0.4–0.55 UAH/USD.

Key influencing factors:

· Decrease in exchange rate fluctuations in May. Following April, May saw a decline in demand for foreign currency, and the NBU is meeting importers’ requests.

· The cash market is not experiencing a rush of demand. There is a noticeable stabilization in the cash segment; the public is selling dollars more often than buying them.

· International factors: the war in Iran continues to affect global investor sentiment, while the Fed is awaiting updated data on inflation and the labor market to make a decision on changing interest rates. Meanwhile, the dollar has strengthened slightly, but the U.S. currency lacks stable support.

· Market expectations: support for Ukraine from international partners and weakening demand for the currency offer hope for a stable May for the hryvnia, and possibly the first month of summer as well. However, the risk of devaluation fluctuations cannot be ruled out. A stable exchange rate is a signal to increase the share of dollar-denominated savings before the rate crosses the 44 UAH/USD threshold again.

Forecast

· Short term (1–2 weeks): base range of 43.98–44.15 UAH/USD, with possible fluctuations in either direction, but without unpredictable spikes.

· Medium term (2–3 months): 44.15–44.65 UAH/USD. The war in Iran is weakening the dollar’s position in the international market, and until a peace agreement is reached between Washington and Tehran, the strengthening of the U.S. currency may be slow and sporadic.

· Long term (6+ months): the baseline scenario is a devaluation of the hryvnia to 44.7–45.7 UAH/$. Despite massive multi-billion-dollar support for Ukraine from its partners, the trade balance is critically skewed toward imports, which puts pressure on the exchange rate and makes the market completely dependent on the main market maker—the NBU. The situation on the front lines, the extent of damage from large-scale attacks on infrastructure, global oil prices, and the replenishment of international reserves will be key factors for the Ukrainian currency market and the pace of exchange rate fluctuations.

Euro exchange rate: dynamics and analysis

Not only did the dollar show stability in the first half of May, but the euro did as well. Since fluctuations in the international market were slow and very insignificant, the euro in Ukraine had no chance of sharp rises or falls. Thus, the month began at 51.46 UAH/EUR, and by mid-May the rate stood at 51.44 UAH/EUR.

No surprises were observed in the cash market.

In early May, the buying rate stood at 50.95–51.4 UAH/EUR, and the selling rate was around 51.75–52.10 UAH/EUR. Two weeks into May, the buying rate was 51.1–51.4 UAH/EUR, and the selling rate was 51.65–51.95 UAH/EUR.

For most cash market participants in May, spreads remained unchanged compared to April levels and stood at 0.45–0.6 UAH, but at some banks, spreads rose to 0.7–0.9 UAH/EUR.

Key influencing factors:

· On the international market, the euro holds a strong position against the dollar: although the dollar continues to trend toward strengthening, the euro has held a stronger position in both April and May, and exchange rate movements are most significantly influenced by global uncertainty regarding the war in Iran.

· In the EU, inflation is rising significantly due to the situation in the oil market. According to the ECB, every 14% increase in oil prices adds 0.5% to the inflation rate, and inflation is expected to reach 2.6% in 2026, while the ECB’s target forecast is 2%. As a result, the ECB plans to raise interest rates, which could undermine the euro’s strong position.

· Demand for the euro in Ukraine remains subdued. There are no major fluctuations in the cash market, and amid the exchange rate stability seen in May, citizens are selling euros more often than buying them.

Forecast

· Short term (2–4 weeks): on the Ukrainian market, the euro may remain within the range of 51.55–51.90 UAH/€.

· Medium term (2–4 months): depending on the policies of the ECB and the Fed, the euro may strengthen to 52.55 UAH/€.

· Long-term (6+ months): The euro exchange rate may remain within the range of 52.40–53.80 UAH/€. Key influencing factors will include the situation in the Middle East, oil prices, and decisions by the central banks of the EU and the US regarding changes to the key interest rate.

Recommendations for Businesses and Investors

Global politics is driving exchange rate trajectories. Negotiations between the U.S. and Iran have currently reached an impasse, and rising oil prices are fueling inflation in both the U.S. and energy-dependent Europe. Under these conditions, it is advisable to keep a “cool head” and prioritize reliable instruments.

The U.S. dollar is strengthening due to expectations of peace in the Middle East and an upcoming Fed rate hike. It is worth preparing for possible changes and having several currency scenarios ready for different periods and with different weightings of major currencies.

Investment security is the focus. The absence of significant market fluctuations can lead to rash decisions. However, the most important thing is to stick to your own strategy and pay attention to the details; the priority is preserving your savings, not making a quick profit.

The U.S. economy continues to grow rapidly, and the dollar is one of the world’s major currencies. The dollar’s liquidity is beyond question, so the share of dollar-denominated investments in the portfolio should be the largest.

Portfolio diversification—cautious and well-thought-out. Unpredictable geopolitics can throw even the most experienced investors off course. Therefore, when formulating a reliable strategy, it is best to stick to the major currencies—the dollar and the euro. However, this does not mean that you should not occasionally add other liquid currencies, including the British pound and the Swiss franc.

Gold is falling in price, but this is not a signal to buy. Amid the lack of news regarding a peace agreement between Tehran and Washington and due to high key interest rates, gold has lost 3% over the past month, reaching a price of $4,690 per ounce. However, adding gold to a portfolio only makes sense if prices continue to fall further.

Oil is gradually getting cheaper, but not enough to support the dollar. In mid-May, Brent crude fell to $104.3 per barrel. However, over three months, the price increase amounted to nearly 54%. Currently, all signs point to a strong euro, and there are reasons to maintain this asset in a balanced portfolio comprising at least 25% of savings in foreign currencies.

The NBU’s discount rate remains at 15%. This means no increase in returns on term deposits and a greater role for foreign currency savings. According to the NBU, inflation in 2026 will be 9.4%. However, there is a very high probability that this forecast will be exceeded, given the significant rise in fuel prices and other goods and services.

Buying dollars is a safe investment. Although the interbank and cash markets are calm for now, the devaluation trend could intensify as early as next month. Now is the best time to buy dollars for a balanced portfolio.

What’s important in the news. The most significant developments are unfolding in global markets—the currency and oil markets. However, it’s also worth monitoring changes in key interest rates in the U.S. and the EU, which could provide support for the dollar or the euro. In the domestic market, the main focus is on reports regarding international reserves, the receipt of tranches from partners, and the IMF’s approval of funding under the new four-year program. Unpredictability both on the global stage and within Ukraine dictates that investors stay focused on what matters most and act cautiously, taking all possible risks into account.

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

The company and its analysts make no representations and assume no liability for any consequences arising from the use of this information. All information is provided “as is,” without any additional warranties of completeness, obligations regarding timeliness, or updates or supplements.

Users of this material should independently assess risks and make informed decisions based on their own evaluation and analysis of the situation using various available sources that they themselves deem sufficiently qualified. Before making any investment decisions, we recommend consulting with an independent financial advisor.

REFERENCE

KYT Group is an international multi-service product-based FinTech marketplace platform that provides financial companies with access to services for promoting their offerings, as well as advertising and consulting services.

Issue No. 1 – April 2026

Analysis of the current situation in Ukraine’s foreign exchange market

In the first half of April, Ukraine’s foreign exchange market saw sustained elevated demand; however, the National Bank of Ukraine regularly supports the market through currency interventions, which curbs fluctuations toward hryvnia devaluation.

However, key factors putting pressure on the hryvnia remain, as high demand for foreign currency is fueled by importers’ contracts for fuel, which is becoming significantly more expensive due to the conflict in the Middle East. Meanwhile, in Ukraine, the planting season has been proceeding at a brisk pace since the last ten days of March and continues to do so now, which also fuels demand for fuel and, accordingly, partly explains the specific dynamics of pricing in the fuel market. Contrary to analysts’ expectations, the war between Israel and the U.S. against Iran has not yet brought the parties to the negotiating table, but hopes for this in April are quite high, which is influencing the trajectory of oil prices and also putting pressure on the U.S. dollar.

Global Context

In April, the dollar is losing ground against the euro, and the DXY index shows that the US currency has depreciated by 2.2% over the past month.

Regarding Fed rates, the next meeting of the Federal Open Market Committee is scheduled for late April. Recall that at the March meeting, the benchmark rate was left unchanged in the range of 3.5% to 3.75%. At the upcoming April meeting, no surprises are expected, and thus rates are expected to remain at the same level. And this is despite the fact that it is already clear: the conflict in the Middle East has led to a sharp rise in energy prices and worsened economic prospects. However, Fed officials are waiting to assess how the economy reacts to the war in Iran. Consequently, financial markets are pricing in a 99% probability that the Fed will keep the federal funds rate unchanged at the April meeting. Currently, the financial world is concerned about who will become the next Fed chair, as Jerome Powell’s term as chair ends in May. The issue of the regulator’s independence is very important, as there are known attempts by the Donald Trump administration to pressure the Fed to lower rates in order to stimulate economic activity.

One of the most significant factors affecting the economy (both in the US and the EU) is the situation in the Middle East. The International Monetary Fund has already revised its global economic growth forecast for 2026 downward: expected global GDP growth will be 3.1% instead of the previously projected 3.3%.

The war in Iran is having a significant impact on the oil market—the blockade of the Strait of Hormuz is having a serious effect. Oil prices began to fall only in mid-April: over the past two weeks, the price of Brent has dropped from around $108 per barrel to $95 per barrel. The reason is optimism amid potential peace talks between the U.S. and Iran: the U.S. president announced that Tehran had contacted Washington regarding a possible agreement. However, the problems in the oil market remain unresolved, and in its latest monthly report, the IEA stated that global oil supplies suffered “the largest disruption in history”: in March, they were reduced by 10.1 million barrels per day—to 97 million barrels per day.

Due to geopolitical tensions in the Middle East, the U.S. dollar is experiencing high volatility. In mid-April, the EUR/USD exchange rate reached 1.1786, although it stood at 1.1520 as recently as late March. Meanwhile, the outlook for the pair’s future trajectory depends not only on the war but also on the inflationary spike expected in Europe due to rising oil prices and, consequently, fuel costs. There is a high probability that the ECB will raise interest rates as early as this summer. Although ECB President Christine Lagarde recently stated that the European Central Bank has not yet decided on the issue of raising interest rates, as the consequences of the war with Iran for the eurozone economy remain unclear.

The Domestic Ukrainian Context

In April, the Ukrainian foreign exchange market continues to be dominated by excess demand over supply. Fuel importers, whose prices continue to rise, have the greatest impact on demand. Earlier in March, the National Bank sold a fairly significant amount of currency on the interbank market—over $4.4 billion—while in February, for example, it sold $2.99 billion. However, interventions decreased somewhat in April: between April 6 and 10, they totaled $765.87 million. Thanks to the NBU’s participation in trading throughout March and then in the first half of April, the hryvnia managed to strengthen, and the exchange rate did not cross the psychological threshold of 44 UAH/USD.

In the cash market in April, demand for dollars and euros remained steady but declined significantly compared to the peak growth in March. Last month, cash currency purchases rose to $2.39 billion, while net cash currency purchases by the public in March amounted to $968 million. In April, thanks to a fairly stable exchange rate situation, there is no rush at cash desks and exchange offices, nor is there a shortage of cash dollars and euros.

In the macroeconomic sphere, Ukraine is in a rather difficult period of waiting. The first review of the International Monetary Fund program is scheduled for June 2026, and provided the review is successful, the fund will disburse the first tranche of $686 million. Meanwhile, the European Union has yet to resolve the issue of disbursing funds to Ukraine under a €90 billion loan program. These resources are critically important for the stability of the Ukrainian economy and for financing the budget deficit. However, the decision to grant the loan was previously blocked by the position of Hungary’s former Prime Minister Viktor Orbán. Recently, Péter Magyar, who became Hungary’s new prime minister, stated that the country would lift its veto on the €90 billion EU loan to Ukraine as soon as oil supplies from Ukraine to Hungary via the pipeline are restored. Oil supplies are expected to resume in May, as Ukrainian President Volodymyr Zelenskyy stated during a joint press conference with German Chancellor Friedrich Merz that repair work on the pipeline would be completed by the end of April.

U.S. Dollar Exchange Rate: Trends and Analysis

In the first half of April, the hryvnia strengthened: while the NBU’s official exchange rate stood at 43.91 UAH/USD at the beginning of the month, it was 43.51 UAH/USD as of April 16. However, the interbank market was still influenced by increased demand, while supply was primarily shaped by interventions from the National Bank of Ukraine. The interbank rate stood at 43.85 UAH per dollar in early April and reached 43.44–43.5 UAH/dollar by mid-month.

In April, exchange rate fluctuations in the cash market stabilized, and the exchange rate moved toward a strengthening of the hryvnia. Overall, the buying rate for cash dollars in mid-April stood at 43.10–43.35 UAH/USD, whereas at the beginning of the month the buying rate was in the range of 43.40–43.60 UAH/USD. The selling rate for cash dollars in mid-April was 43.7–43.8 UAH/USD, while at the beginning of April, the selling rate at bank teller windows and currency exchange offices was in the range of 43.99–44.15 UAH/USD. As for the spreads between the buying and selling rates, they narrowed slightly—to 0.3–0.55 UAH/USD—which indicates a stabilization of the situation and a reduction in currency risk for institutions, and also suggests a positive outlook regarding the absence of panic demand for cash currency in the coming weeks.

Key influencing factors:

· Reduction in the volume of currency interventions by the NBU: The National Bank remains the main market maker in the foreign exchange market; however, in April, the regulator’s dollar sales volumes were already lower than in March, and exchange rate fluctuations were smoother.

· Strengthening of the hryvnia exchange rate in April: this was facilitated by a temporary decline in demand for foreign currency from importing companies, as well as a noticeable drop in demand in the cash market.

· International factors: The dollar is losing ground in the global market amid the complex situation in the Middle East and expectations of de-escalation between Iran and the U.S., which is driving investors back to euro-denominated assets.

· Market behavioral expectations: The dollar remains a stable, liquid asset in the domestic market, and the hryvnia’s short-term strengthening provides an incentive for active investment in this currency.

Forecast

· Short term (1–2 weeks): base range of 43.70–44.20 UAH/USD, with likely fluctuations toward hryvnia depreciation, though rebounds toward the national currency’s strengthening are also possible.

· Medium term (2–3 months): 44.20–44.85 UAH/USD. On the international market, fluctuations in the dollar exchange rate will be influenced by the situation in the Middle East and potential negotiations between Tehran and Washington. There is a high probability that the Fed will not change rates at least until summer, which will give investors confidence in the growth potential of the U.S. economy despite all the risks caused by the war in Iran. A trend toward dollar strengthening is possible, especially after the situation in the Middle East stabilizes.

· Long-term (6+ months): the baseline scenario is a devaluation of the hryvnia to 44.5–45.5 UAH/$. The national currency will remain under pressure from both external and internal factors, with the most significant being signals from partners regarding continued support for Ukraine, the receipt of a tranche from the IMF, and the $90 billion loan program from the EU.

Euro exchange rate: dynamics and analysis

In April, the euro’s exchange rate against the hryvnia rose due to the global trend of the euro strengthening and the U.S. dollar weakening, which correspondingly affected the euro’s exchange rate in Ukraine. April began with the official euro exchange rate at 50.45 UAH/EUR, and as of April 16, the rate reached 51.27 UAH/EUR.

Meanwhile, there was no increased demand for the euro in Ukraine’s cash market in April, as the stabilization of the dollar’s exchange rate on the interbank and cash markets dampened the frenzy. At currency exchange offices and bank teller windows, the euro exchange rate fluctuated as follows during the first half of April: in early April, the buying rate was 50.0–50.7 UAH/EUR and the selling rate was 51.0–51.2 UAH/EUR, while in mid-April, the buying rate rose to 50.85–51.0 UAH/EUR. The strengthening of the euro on the global market was also reflected in the selling rate for cash euros—the rate reached 51.5–51.8 UAH/EUR.

Spreads between exchange rates widened again in mid-April amid continued uncertainty regarding the euro’s trajectory on the global market; consequently, banks have again set spreads at 0.5–1 UAH/EUR instead of the previous 0.5–0.6 UAH/EUR.

Key influencing factors:

· The euro is strengthening on the international market amid a decline in the US dollar: the euro-dollar exchange rate rose to 1.1786 in April, which influenced the exchange rate trajectory on Ukraine’s domestic market.

· Investors are returning to euro-denominated assets as they lose confidence in the US dollar: the conflict in the Middle East is not over, and the ECB may raise rates as early as this summer due to inflationary pressures.

· Declining demand for the euro in Ukraine: The public bought a large amount of currency in March, and in early April, ahead of Easter celebrations, currency sales predominated as people made necessary preparations for the holiday. The stable hryvnia-to-dollar exchange rate fostered expectations of no turmoil in the currency market, and demand for the euro fell.

Forecast:

· Short term (2–4 weeks): if the euro continues to strengthen on the global market, the euro may remain within the 51.0–51.90 UAH/€ range on the Ukrainian market.

· Medium term (2–4 months): the euro may appreciate to 52.5 UAH/€. Falling oil prices and updated data from the ECB on eurozone inflation could strengthen the euro’s position.

· Long term (6+ months): if negotiations between Iran and the U.S. are successful and following the Fed’s decision on the next rate cut, the exchange rate may settle within the range of 52.80–53.60 UAH/€.

Recommendations for businesses and investors

Geopolitical turbulence influences financial decisions and confidence in currency assets. Key directions of change will be determined by the negotiation track between Tehran and Washington. Investors need to monitor the news, especially statements from Iran.

Fed rates will influence the future exchange rate trajectory of the EUR/USD pair. Currently, traders are confident in rate stability, but Jerome Powell’s departure from the chairmanship in May could throw a wrench in the works.

The U.S. labor market as an indicator. Investors should study official publications from the U.S. Department of Labor to react in a timely manner to the high probability of another round of Fed rate cuts.

Oil prices move in tandem with currency quotes. A significant drop in oil prices would signal improved prospects for the U.S. dollar and, consequently, the potential for a slight decline in the euro’s exchange rate.

Focus on safe-haven assets. Geopolitical conflicts and high risks of a slowdown in the growth rates of the world’s major economies are making it increasingly relevant to invest in straightforward instruments, including the dollar and the euro.

ECB decisions will influence the euro exchange rate. As inflation rises in Europe, the ECB may raise base rates. This could weaken the euro’s position.

The key requirement is high liquidity. Investors can build their portfolios in various currencies, but given liquidity, the dollar and the euro remain the core assets. Other currencies that can be used in your strategy include the British pound, the Swiss franc, and the Polish zloty.

The US dollar is at the center of the currency strategy. Despite the uneven fluctuations of the dollar exchange rate on the global market, dollar holdings in a portfolio can range from 40% to 70%, as the dollar’s role as the world’s primary reserve currency and the devaluation trends regarding hryvnia exchange rate fluctuations in Ukraine determine the absolute importance of dollar holdings.

The NBU’s discount rate as a signal for a short-term shift to the hryvnia. If the NBU raises the discount rate, a small portion of holdings can be reallocated to hryvnia-denominated assets—short-term deposits or government bonds. However, this involves investing approximately 10–15% of the portfolio.

What’s important in the news. First and foremost, information on negotiations between Iran and the U.S., oil market prices, new decisions by the Fed and the ECB, as well as analysis of inflation levels in Europe and the U.S. In Ukraine, the main drivers of currency market behavior will be the situation on the fuel market, possible large-scale shelling of infrastructure facilities by the aggressor, as well as news regarding the receipt of tranches from partners and creditors.

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

The company and its analysts make no representations and assume no liability for any consequences arising from the use of this information. All information is provided “as is,” without any additional warranties of completeness, obligations regarding timeliness, or updates or supplements.

Users of this material must independently assess risks and make informed decisions based on their own evaluation and analysis of the situation using various available sources that they themselves deem sufficiently qualified. Before making any investment decisions, we recommend consulting with an independent financial advisor.

ABOUT

KYT Group is an international multi-service product-based FinTech marketplace platform that provides financial companies with access to services for promoting their offerings, as well as advertising and consulting services.

Issue No. 1 – March 2026

The purpose of this review is to provide an analysis of the current situation in Ukraine’s currency market and a forecast of the hryvnia exchange rate against key currencies based on up-to-date data. We examine current conditions, market dynamics, key influencing factors, and likely scenarios for future developments.

Analysis of the Current Situation in the Foreign Exchange Market

In March, Ukraine’s foreign exchange market entered a phase of increasing turbulence driven by both external and internal factors.

The exchange rate trajectory is consistently and quite rapidly moving toward hryvnia devaluation, with this trend significantly intensifying in the first half of March. The focus in March is on the military conflict between the U.S. and Iran, which is causing increased turbulence in the fuel market and contributing to the weakness of the euro. In Ukraine’s domestic market, there has been a sharp rise in demand for the dollar and the euro, while the National Bank is trying to balance high demand for foreign currency with the need to maintain international reserves at a sufficient level. Meanwhile, inflation is gaining momentum, and Ukraine’s receipt of the promised €90 billion from the EU is being delayed due to the outright dissatisfaction of Hungary and Slovakia.

Global Context

In global markets, the dollar is strengthening against a backdrop of a weakening euro. The DXY index shows that the U.S. currency has appreciated by 3.33% over the past month, while the euro is losing ground.

The main trigger is the situation in the fuel market, caused by the conflict in the Middle East. Oil prices have surged sharply as Iran has intensified attacks on oil and transportation facilities across the Middle East, fueling fears about the duration of the conflict and potential disruptions in oil supplies. The price of Brent crude rose in mid-March to over $101.40 per barrel. Moreover, the price of oil was unaffected by the International Energy Agency’s (IEA) announcement of its intention to release a record 400 million barrels of oil to mitigate the economic impact of the war between the U.S., Israel, and Iran. Currently, investors are concerned that the global economy will take longer to recover if attacks on shipping and energy infrastructure in the Strait of Hormuz continue. Some analysts have already forecast that oil prices could rise to $140 per barrel in the coming weeks.

The EUR/USD pair experienced several significant fluctuations in March, but the dollar has managed to strengthen its position. While the month began at 1.1766, by mid-March the U.S. currency had reached 1.1445. The euro is losing ground due to its economy’s reliance on fuel imports from other regions.

Investors currently view the dollar as a safe haven, especially given that the U.S. is a major energy exporter. The longer the blockade of the Strait of Hormuz lasts, the higher the chances of the dollar strengthening against the euro.

However, it is not only the situation in the Middle East that plays a role in potential fluctuations in the exchange rates of major currencies. Investors are awaiting decisions from central banks: will the Fed and the ECB react to the situation and will they change key interest rates?

Expectations regarding decisions in March are quite subdued. The point is that the European Central Bank may raise rates, but not before June. And the U.S. Federal Reserve, whose Committee meeting will take place in late March, may even postpone consideration of a change in the base rate until September. However, everything will depend on the latest data on inflation and the situation in the U.S. labor market.

New data from the Bureau of Labor Statistics showed that the U.S. economy lost 92,000 jobs in February, while inflation in the U.S. remained stable—consumer prices rose by 2.4% in February (year-over-year). However, a war between the U.S. and Iran could trigger an acceleration of inflation to over 3% in the coming months, so uncertainty regarding the Fed’s potential rate decisions is growing, and investors are focused on how the conflict in the Middle East will affect price dynamics.

Domestic Ukrainian Context

In March, the Ukrainian foreign exchange market saw rising demand in both the non-cash and cash segments. The increase in importers’ needs is linked both to purchases of energy equipment required for repairs to energy infrastructure and to a growing need for foreign currency to purchase fuel, as Ukraine is an importer of gasoline and diesel and contracts for the necessary volumes of fuel in European Union countries.

Meanwhile, Ukraine’s international reserves decreased by 5% in February and, as of March 1, 2026, stood at $54.75 billion according to preliminary data. The National Bank explained that this trend was driven by the NBU’s currency interventions and the country’s debt payments in foreign currency, and these transactions were only partially offset by inflows from international partners and from the placement of government bonds. The current level of international reserves is sufficient to finance 5.7 months of future imports.

The clear devaluation trend is driving increased demand for cash currency among the public. To prevent a cash currency shortage in the market, the NBU conducted several operations in March to exchange banks’ non-cash currency for cash currency to replenish cash reserves. Consequently, banks have sufficient reserves of foreign currency, and there is no shortage of cash dollars or euros. The NBU reported that it is monitoring the situation and is ready to support banks in supplying cash foreign currency to their teller windows.

As for international aid, it is still unknown when Ukraine will receive the first tranche of the €90 billion approved by the EU as part of its support for 2025–2027. Hungary and Slovakia’s stance is standing in the way. However, the European Union is discussing another option to help Ukraine—providing a bilateral loan of €30 billion, which would not require approval from all EU members.

The domestic currency market is under some pressure because, on the one hand, rising prices for petroleum products are stimulating increased currency purchases on the interbank market, while on the other hand, amid uncertainty regarding further aid tranches from the EU and other partners, the National Bank cannot flood the market with interventions to curb devaluation.

U.S. Dollar Exchange Rate: Trends and Analysis

During the first half of March, the U.S. dollar strengthened on the Ukrainian currency market. The official exchange rate stood at 43.2 UAH per dollar at the beginning of the month, and by the end of the second week of March, it had already reached 44.14 UAH/USD. The interbank market is moving upward in fairly sharp spurts: while March began with a rate of 43.21 UAH per dollar, by March 13, trading was taking place within the 44.12–44.17 UAH/USD range.

The cash market saw devaluation fluctuations in March. The buying rate reached the 43.80–44.10 UAH/USD range in the middle of the month, while the selling rate remained within 44.35–44.60 UAH/USD.

The dynamics of spreads between buying, selling, and the official rate indicate that banks are anticipating further exchange rate fluctuations and are therefore factoring in additional premiums and risks into their rates. The lack of predictability and balance is reflected in the widening of spreads between buying and selling rates in the cash market to 0.45–0.60 UAH/USD.

Key influencing factors:

· Rising demand for foreign currency in the interbank market: importers are increasing their currency purchases, particularly amid rising oil prices.

· Support for the currency market from the National Bank: The NBU responds to spikes in demand with interventions, and the NBU also supports bank tellers to ensure the necessary volumes of foreign currency cash.

· International factors: the strengthening of the dollar in the global market (the DXY index has risen by 3.33% over the past month) is increasing pressure on the hryvnia, compounded by the oil factor, as rising oil prices are driving additional demand for foreign currency, causing demand to grow.

· Market behavioral expectations: The dollar remains the primary asset in the domestic market, with demand rising significantly, fueled by the exchange rate breaking through the psychological threshold of 44 UAH/USD.

Forecast

· Short term (1–2 weeks): base range of 43.90–44.30 UAH/USD, with a likely bias toward 44.20 UAH/USD.

· Medium term (2–3 months): 44.30–44.90 UAH/USD. On the international market, the dollar’s strengthening will be influenced by expectations of stability in the Fed’s rate decisions, as well as the situation in the Middle East. Hostilities in Iran are driving up oil prices, which is seriously weakening the euro’s position.

· Long-term (6+ months): The baseline scenario projects a devaluation of the hryvnia to 44.4–45.5 UAH/USD. Key influencing factors will include the situation on the front lines in Ukraine, the resolution of the issue regarding the arrival of the first tranche of financial aid from the EU to Ukraine, the gap between state budget revenues and expenditures, and the extent of the dollar’s strengthening in the global market.

Euro exchange rate: dynamics and analysis

In the first half of March, the euro-to-hryvnia exchange rate fell, driven by rising global energy prices and investors’ return to the dollar as a safe-haven asset. The corresponding strengthening of the dollar was also reflected in the value of the euro in Ukraine, where the month began with an official exchange rate of 51.02 UAH/EUR, and by mid-month the rate reached 50.66 UAH/EUR.

In the cash segment, the euro exchange rate remained virtually unchanged during the first two weeks of March, driven by relatively high demand.

At the beginning of the month, the euro buying rate at banks and currency exchange offices was 50.3–50.7 UAH/EUR, and the selling rate was 51.3–51.4 UAH/EUR; by mid-March, the euro buying rate stood at 50.2–50.70 UAH/EUR, and the selling rate was 51.1–51.50 UAH/EUR.

Banks factor their risks and the high volatility of the euro into their rates, which is why spreads are widening: in mid-March, the spread between the euro’s buying and selling rates was 0.65–1 UAH/EUR.

Key influencing factors:

· Global weakening of the euro: The euro-to-dollar exchange rate fell to 1.1445 in mid-March, which also affected the euro’s trajectory in the Ukrainian domestic market.

· Expectations of unchanged Fed monetary policy: The dollar is bolstering investor confidence that the benchmark rate will not be changed in March; the international situation and rising oil prices are also weighing on the euro.

· Inflation in the EU may rise due to higher energy prices: this could influence the ECB’s monetary decisions but will not prevent the euro from weakening.

· High demand for cash currency in Ukraine: The NBU is supplying banks with cash to prevent a shortage in the cash market.

Forecast

· Short term (2–4 weeks): given external factors and stable demand, the euro exchange rate may remain within the range of 50.85–51.70 UAH/€.

· Medium term (2–4 months): a break above 52.5 UAH/€ is likely, especially in the event of a sharp strengthening of the dollar in the global market.

· Long-term (6+ months): provided that inflation rises in the EU and the US and central banks decide to adjust benchmark rates, as well as if high oil prices persist for an extended period, a rise to levels above 53.00–53.50 UAH/€ is likely.

Recommendations for businesses and investors

March and April will be full of exchange rate “surprises,” as exchange rate trajectories may be quite volatile and move in different directions. Given the high risks for investors due to the instability of the global security situation and the overheated oil market, currency strategy must remain cautious and flexible, while also accounting for various possible scenarios.

Security – the top priority. Financial instruments are needed that allow for a quick response to a paradigm shift. This means avoiding fixed-term deposits without the option of early termination, as well as focusing on preserving assets without losses, which typically involves holding cash reserves in foreign currency.

Liquidity – a fundamental requirement. Currency assets should be held in liquid currencies, with the dollar and euro remaining the primary ones. However, investors seeking to diversify risks should also consider Swiss francs and British pounds.

The dollar is the cornerstone of currency strategy. The strengthening of the U.S. dollar reinforces the view that dollar holdings should account for at least 50% of an investor’s currency portfolio. The hryvnia’s depreciation trend underscores the importance of holding funds in dollars and, due to uneven exchange rate fluctuations, offers opportunities for short-term speculative trades.

The euro – the decline may turn into growth. Currently, the euro’s exchange rate dynamics are driven by the conflict in the Middle East and the situation in the oil market. However, in the long term, the euro may regain its footing if oil prices stabilize and inflationary pressures in Europe ease. In a balanced currency portfolio, it is advisable to hold about 30% of assets in euros.

Spreads—one of the indicators for decision-making. In the spring of 2026, spreads are widening in both the USD/UAH and EUR/UAH pairs. This is a consequence of high uncertainty and risks faced by market operators, who are factoring in potential high volatility into their exchange rates. For investors in such a situation, it is important not to make hasty moves, but when a narrow spread is present, to consider a quick currency purchase.

It’s time to focus on the euro. The international situation is working against the euro, but for domestic investors, the cheap euro presents a favorable opportunity to enter into euro-denominated investments. If a business model uses the euro as its base currency, it is advisable to factor in potential scenarios where the exchange rate rises above 51.5 UAH/€ in contracts.

The lack of precise exchange rate benchmarks is a reason to update your strategy, not to make hasty decisions. The unpredictability of the exchange rate trajectory creates the impression of a quick profit opportunity. However, it is important to work through several scenarios to avoid getting too carried away with risky speculative transactions.

The hryvnia is for current payments and expenses, not for long-term savings. The hryvnia exchange rate is steadily falling: in January, the interbank market tested the 42.19 UAH/USD level, and in March—44.17 UAH/USD. It makes sense to convert hryvnia holdings into one of the liquid currencies, particularly the dollar and the euro.

What’s important in the news. First and foremost, information about events in the Middle East, oil price dynamics, as well as decisions by the Fed and the ECB. In the domestic market, additional exchange rate spikes are possible due to changes in the energy sector and the receipt of new tranches of international loans and financial aid from partners.

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

The company and its analysts make no representations and assume no liability for any consequences arising from the use of this information. All information is provided “as is,” without any additional warranties of completeness, obligations regarding timeliness, or updates or supplements.

Users of this material must independently assess risks and make informed decisions based on their own evaluation and analysis of the situation using various available sources that they themselves deem sufficiently qualified. Before making any investment decisions, we recommend consulting with an independent financial advisor.

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