The Ukrainian currency market has recently demonstrated resilience amid rising geopolitical tensions and economic uncertainties. The transition to euro as the main currency for transactions is now considered by economists to be a rational step forward for Ukraine's economy.
Yaroslav Zhalilo, deputy director of the National Institute for Strategic Studies, asserts, "The transition to euro as the main currency for transactions in Ukraine will be a logical step for the economy." He emphasizes the practicalities of using the euro, particularly for external trade, especially as Ukraine continues to receive substantial support from European Union nations, where the euro is the predominant currency.
Despite the pressures from global markets, the hryvnia has shown impressive stability. From February 17 to February 21, 2025, the dollar's interbank rate edged up merely by 1.5 kopiykas, moving from 41.595/41.625 to 41.61/41.64 UAH. The euro experienced even more negligible shifts, dropping just under 1 kopiyka to end the week at 43.6114/43.6262 UAH.
Almost paradoxically, the local currency is thriving against significant external pressures. "The three last years of military conflict have generated a kind of news immunity among Ukrainians, allowing our market to filter out events and statements from international figures like faces less strongly than before," observes one financial analyst. Notably, the currency market's reaction to international political fluctuations is less volatile now, demonstrating maturity and adaptation.
Reinforcing this stability is the active role of the National Bank of Ukraine, which diligently addresses the dollar supply deficit on the market. This proactive approach has been pivotal during these turbulent times, aiding local businesses adapt to the consistent threats from drone attacks and missile strikes.
Analysts also underline the support provided by budget payments at this time, which stimulates local currency sales, albeit constraining importers. Overall, the situation remains controllable for now, instilling confidence across the market. Zhalilo offers insight, stating, "The dollar will likely not be stable anytime soon due to political and economic challenges," signaling potential risks to the dollar's future performance.
Looking forward to February 22-23, the anticipated ranges for currency trading show modest fluctuations. Exchange rates for the USD against the hryvnia could rest snugly between 41.20 to 42.00 UAH, with the euro hovering around 43.85 to 44.20 UAH. This relatively stable forecast offers some reassurance, even as exchange offices remain adequately stocked with both local and foreign currencies.
Andriy Shevchishyn, another financial analyst, shares his forecast, noting, "Expect no significant decrease in the dollar exchange rate soon." He warns of potential increases, particularly if the conflict persists, predicting the dollar could soar to around 47 UAH by year’s end or up to 46 UAH if adversity continues. Nevertheless, he also points out potential stability for the hryvnia if the situation significantly improves.
While some aspects may seem discouraging, the presence of foreign currencies like the Polish zloty and Swiss franc within local exchange houses enhances options for customers and brings positive assurance to the market, mitigating extreme scenarios. Ukrainian businesses and citizens appear to be holding their ground more than ever.
Consequently, even with persistent challenges and threats, the outlook for Ukraine’s currency shows promise as the economy adapts. While the notion of switching to the euro continues to gain traction, it remains intertwined with market conditions and geopolitical developments.
All considered, the strength and flexibility of local markets present a hopeful scenario for Ukraine, where the realistic shift toward the euro could streamline trade transactions and stabilize economic conditions amid uncertainties.