Hryvnia Stability Through Year-End: Why Ukraine’s Central Bank Has a Strong Case

July 8, 2025. The volatility of the Ukrainian hryvnia has decreased noticeably recently, and analysts see reasons for this trend to continue until the end of the year. According to a new weekly review by investment company ICU, the National Bank of Ukraine (NBU) now has an additional, substantial argument for maintaining the stability of the national currency – growing international reserves backed by external aid. However, experts are already looking ahead and warning of potential challenges in 2026.

What’s Happening on the Forex Market Right Now?

As reported, citing the ICU review in RBC-Ukraine, positive dynamics are observed on the interbank market: demand for foreign currency is gradually decreasing. The average daily net purchase of currency by banks fell to $86 million from $125 million the week before. This allowed the NBU to reduce the volume of interventions and keep the official exchange rate in a very narrow range of UAH 41.72–41.82 per dollar.

However, retail demand traditionally picked up at the beginning of the month. After limits were refreshed, the net purchase of currency by the population increased by a third, exceeding $75 million, while purchases through mobile banking apps almost doubled. This retail pressure partly explains why the cash dollar in banks trades in the range of UAH 41.5–42, exceeding the upper limit of the official corridor. Up-to-date information on current rates in banks and exchange offices can always be tracked in the dedicated section.

The NBU’s Main Argument: Growing Reserves

Despite the seasonal increase in demand from the population, the key stability factor lies in the realm of international support. ICU analysts note that thanks to external aid flows, Ukraine’s international reserves could exceed $50 billion by the end of 2025.

“Therefore, the NBU now has additional arguments to keep the hryvnia exchange rate relatively strong against the dollar, especially given the sufficient resources for interventions,” the forecast states.

There is another nuance. In spring and June, the dollar weakened significantly against the euro, leading to some depreciation of the hryvnia’s effective exchange rate (calculated against a basket of currencies). This gives the regulator room for maneuver to compensate for this weakening by keeping the nominal exchange rate to the dollar stable.

Why Is This Important for Business and the Economy?

A stable and predictable exchange rate is the lifeblood for the economy under war conditions.

• For importers and companies with foreign currency loans: Reduces the risks of a sharp increase in procurement costs and debt servicing, allowing for more confident budget planning.
• For the population: Restrains inflationary pressure associated with the rising cost of imported goods.
• For macroeconomic stability: It is a key condition for fulfilling the tasks agreed with the International Monetary Fund (IMF) and the continuation of financial support.

It is important to note that the IMF, as follows from the ICU review of the 8th program review, emphasizes the need for the exchange rate to better reflect market conditions, with the intervention strategy supporting its flexibility. This means the NBU is operating within a delicate balance between stabilization and market signals.

What’s Next? A Look at 2026

The ICU forecast contains an important warning that businesses and investors should pay attention to today.

“However, in 2026, inflows of external aid may decrease, which will create pressure on both the NBU’s reserves and the hryvnia exchange rate,” the analysts note.

This means that the current stability is largely secured by external factors. In the medium term, the key issue will be diversifying sources of foreign exchange liquidity – through export growth, attracting foreign direct investment, and internal market mechanisms.

Bottom line: Until the end of 2025, the NBU has significant resources and arguments to contain sharp fluctuations in the hryvnia. This creates an important “window of stability” for economic agents. However, it is already worth preparing for the fact that next year, monetary policy may face new challenges, and the factor of external aid may weaken.