Financial sector news

The National Bank of Ukraine is maintaining a tough stance in negotiations with the International Monetary Fund, which is calling for more active devaluation of the hryvnia during discussions on a new cooperation program. The regulator disagrees with this demand, believing that the current policy of managed flexibility ensures market stability and confidence in the national currency, according to an article in Ekonomichna Pravda.

Despite a record foreign trade deficit, the hryvnia remains stable thanks to significant inflows of external financing. Since the beginning of the year, Ukraine has received more than $37 billion in loans and grants from partners, which covers the trade gap. Foreign exchange reserves remain close to historic highs, and the difference between the cash and official exchange rates has almost disappeared, indicating a balanced market with no signs of administrative intervention.

According to the regulator, a sharp weakening of the hryvnia could increase inflationary risks, increase the cost of energy and weapons imports, and complicate the servicing of public debt, most of which is denominated in foreign currency.

The banking community largely supports the National Bank's position. Leading financial institutions predict that the exchange rate will remain stable and that there will be a gradual, controlled devaluation without sharp fluctuations. Analysts at Raiffeisen Bank expect the exchange rate to remain close to UAH 43 per dollar by the end of the year, while OTP Bank points to a possible corridor of UAH 41.5–42 per dollar. Avangard Bank also predicts that the NBU will maintain its cautious policy, although it acknowledges that public statements by the IMF may temporarily increase demand for currency.

Market experts emphasize that devaluation is not a universal tool for balancing the trade balance, as most of Ukraine's imports belong to inelastic categories — energy, military, and investment goods. Therefore, the effect of the hryvnia's weakening will be limited, while the risks to price stability and confidence in the national currency remain significant.

The general consensus among experts is that the NBU will maintain a policy of gradual, controlled exchange rate dynamics, keeping the hryvnia in the range of about 42–43 UAH per dollar until the end of the year. This approach allows for maintaining macrofinancial stability and minimizing shocks to the economy in wartime conditions.