The Hryvnia Weakens Against the Dollar but Strengthens Against the Euro: What is Happening with the Exchange Rate

Ukrainian economist and member of parliament Yaroslav Zheleznyak explained why the dollar has risen to over 45 hryvnias while the euro has simultaneously decreased. He also described how much currency the National Bank sold to stabilize the exchange rate and how the exchange rate embedded in the budget may affect prices and incomes of Ukrainians. Zheleznyak discussed this in a video on YouTube. In the budget forecast for 2027, the government projected the dollar to be 47.1 hryvnias.

Why the Dollar Has Increased, and the Euro Has Decreased

According to Zheleznyak, at the beginning of 2026, the dollar was around 42.35 hryvnias, and on October 6, its rate reached 45.06 hryvnias. This is approximately 6.4% more than at the start of the year. The euro, on the contrary, after rising to 52 hryvnias in September, has decreased to about 50.48 hryvnias.

This different dynamic is not related to the strengthening of the hryvnia against the euro but is due to the weakening of the European currency against the dollar. Among the reasons, he pointed out issues within the European economy, particularly the debt difficulties in France.

To prevent further increase in the dollar's value, the National Bank is selling currency in the market. Zheleznyak stated that in September the regulator sold 5.5 billion dollars. This is the largest monthly volume since the beginning of the full-scale invasion. Previously, significant foreign currency expenditures by the National Bank had been reported in the material about how the National Bank spent $5 billion in reserves.

How the Dollar Exchange Rate Affects the Budget and Incomes of Ukrainians

Zheleznyak outlined several reasons for the pressure on the hryvnia: a decrease in exports and logistics problems, the need for defense enterprises to purchase imported components, and an increase in demand for currency following the easing of some National Bank restrictions.

The exchange rate also impacts budget revenues. According to Zheleznyak's estimates, every hryvnia change in the exchange rate adds about 18 billion hryvnias in VAT from imports. Since this tax is paid during the importation of goods, devaluation can increase budget revenues but simultaneously raise the cost of imports for consumers.

The consequences are also felt by people who receive salaries in hryvnias. Zheleznyak provided an example of an employee with a salary of 30 thousand hryvnias: in dollar equivalents, this amount has decreased from approximately 708 to 665 dollars. Nevertheless, he emphasized that predicting the exact exchange rate several months in advance is impossible. Analysts have also previously shared estimates regarding what the dollar exchange rate might be in the fall of 2026.