Ukraine's Foreign Exchange Policy from 2022 to 2026: A Critical Review
An examination of the National Bank of Ukraine's (NBU) currency strategy between 2022 and 2026 reveals it was effective for crisis survival but carries long-term risks. Rather than relying on domestic economic strength, the hryvnia's stability has been propped up by central bank interventions, administrative controls, and foreign financial aid. Key turning points during this period include pegging the official exchange rate on February 24, 2022, a 25% devaluation in July 2022, and the shift to a managed float system on October 3, 2023.
Immediately after February 24, 2022, the NBU adopted a fixed exchange rate, setting the official hryvnia-to-dollar rate at 29.25 UAH per USD. In July 2022, the central bank implemented a one-off 25% correction, bringing the rate to 36.5686 UAH per USD. As of April 24, 2026, the official rate stood at 43.9412 UAH per USD and 51.3804 UAH per EUR.
Throughout 2025 and into 2026, the NBU engaged in heavy net currency sales. In December 2025, net sales reached roughly $4.46 billion, followed by $3.74 billion in January 2026, nearly $3.0 billion in February 2026, and about $4.77 billion in March 2026. Ukraine's international reserves stood at $57.3 billion on January 1, 2026, but by the end of March 2026, they had dropped to $52.0 billion.
Challenges and Outlook for Currency Policy
At the start of 2026, the structural deficit in Ukraine's balance of payments was estimated at around $47 billion on an annualized basis—equivalent to roughly 22% of GDP. Additionally, the trade deficit could exceed $60 billion per year. In December 2025, annual inflation eased to 8.0%, though the NBU's inflation target remains 5%.
'The hryvnia exchange rate has become not just an economic indicator but a psychological symbol of the state's ability to maintain control over the financial system.' Bohdan Danylyshyn
Danylyshyn also stresses that 'Ukraine has achieved exchange rate stability for survival, but has not yet attained currency resilience for development.' He adds, 'The current exchange rate stability is, to a large extent, imported stability,' pointing out that the hryvnia is supported not by a strong external sector but by continuous external financing.
Danylyshyn notes that 'without coordinated fiscal, industrial, trade, and energy policies, the central bank cannot solve the economy's structural problems on its own.' He further observes that 'the biggest problem is that the NBU's currency policy has become a substitute for a broader economic strategy.' Specifically, he emphasizes that 'the exchange rate cannot replace industrial policy.' Another critical point is that 'the NBU's reserves cannot serve as an endless source to compensate for the trade deficit.'
In summary, while the NBU has successfully managed to support the hryvnia during the crisis, serious challenges remain for achieving long-term currency stability. The need for coherent economic policies and structural reforms is evident to address the trade deficit and stabilize the balance of payments. Without such efforts, Ukraine risks deepening its reliance on external funding and facing future economic shocks.
As the National Bank of Ukraine grapples with significant currency challenges, recent developments highlight the ongoing struggle to stabilize the hryvnia. In just one week, the central bank's substantial spending of $1.3 billion failed to prevent the currency's decline, raising questions about the effectiveness of its interventions. For a deeper understanding of the current situation and its implications for Ukraine's economy, read more about the central bank's recent actions and their impact on the hryvnia.