Reserves for the hryvnia: at whose expense does the National Bank support the Ukrainian national currency?
5 February 11:43
ANALYSIS FROM 
In response to January’s fluctuations in the hryvnia, the National Bank of Ukraine has stated that nothing unusual is happening and that the situation is under control. Komersant investigated whether this is indeed the case.
Ukrainian citizens, who are accustomed to following the hryvnia’s exchange rate movements, had more than one reason to be concerned and ask questions such as “what is happening” in January. It was in January that the hryvnia repeatedly hit historic lows against the euro, reaching 51.24 hryvnia per euro on January 30. The hryvnia’s competition with the dollar also unfolded to the detriment of the Ukrainian national currency. On January 12, the psychological barrier of 43 hryvnia per dollar was broken, and on January 19, the bar rose to a record level of 43.41 hryvnia. In short, there were reasons for concern, and at the end of the first month of the year, the NBU attempted to address them.
Currency race
The NBU considers the January fluctuations in the currency market to be seasonal and temporary. As an argument, they point out that after the weakening of the hryvnia, a reverse trend is already being observed – its strengthening. The main factor putting pressure on the hryvnia is said to be the record budget payments in December 2025. They reached about UAH 93 billion. This traditionally increases the demand for foreign currency, primarily the US dollar. Additional pressure on the currency market is also associated with the need to increase imports of fuel, electricity, and energy equipment to Ukraine.
In general, according to the NBU, the dynamics of changes in the currency market are typical for the transition between the end of the year and the beginning of a new financial cycle.
However, there are some factors that are not entirely typical. As noted by Oleksandr Savchenko, professor and rector of the International Institute of Business, what is happening with the hryvnia is also largely due to fluctuations in the euro/dollar exchange rate on the global market.
“The unpredictable policies of the current US president are causing instability in international financial markets. The US currency is periodically in turmoil. And if, for example, the dollar loses value, the euro gains weight. The hryvnia remains a hostage to this competition. But the National Bank has managed to calm the situation through currency interventions,” the expert notes.
And the National Bank had to calm the market more than once. Especially in mid-January, when the Ukrainian national currency temporarily weakened to 43.41 hryvnia per dollar. If we recall that the year began with an exchange rate of about 42.35 hryvnia, then the devaluation, as calculated by the NBU, was about 2.5 percent. It was more difficult to curb the hryvnia’s exchange rate against the euro. On January 30, the euro settled at 51.24 hryvnia per euro. Financial analyst Andriy Shevchyshyn continues.
“In the first two weeks of January, we saw a controlled devaluation. Then this devaluation reached such unexpected levels that it required sharp intervention by the NBU, and it began to dampen existing demand with currency interventions. And now everything has stabilized. There was also another important factor, namely the rapid rise in the price of the euro on the world market. In general, the NBU can lower the dollar and fix the euro, but with such rapid growth as we saw last week, this was unrealistic. And the NBU was forced to let the hryvnia rise above 51 UAH to the euro. Now, most likely, there will be stabilization at the level of 51 UAH to the euro, and then the NBU will adjust the dollar in accordance with the cross rate that we will see on the world market,” the expert explains.
Currency support
During January, Ukraine’s international reserves “shrunk” by more than $3 billion. Perhaps this is not so much. As is known, as of January 1, 2026, these reserves amounted to $57.29 billion, which is the highest figure in the history of independent Ukraine.
It is these more than $3 billion that the National Bank had to pay to smooth out exchange rate fluctuations and ensure a controlled devaluation of the hryvnia, rather than a collapse or panic. Although such a scenario is probably not even considered by NBU representatives. And there are more than enough reserves. Financial analyst Andriy Shevchyshyn continues.
“If we look at the NBU’s forecast, which was published after the decision on the discount rate, we see that the NBU expects a significant increase in gold and foreign exchange reserves in 2026 — up to $65 billion. That means we are set to reach a new record high. This forecast is based on expected aid inflows, and it has been revised to make it clear that the reserves will increase from $52.2 billion to $65 billion, i.e., an improvement of almost $13 billion. If aid comes in as promised, then the $3 billion spent on interventions in January won’t be a problem. In fact, I think that in the future, it won’t be $3 billion a month that’s spent, but maybe even more, since imports will exceed exports. This is due to the need for additional electricity imports, military imports, and other existing problems. But there are enough resources to support the hryvnia, and the National Bank will do so under certain circumstances,” the expert believes.
This means that there will be another reason to consider controlled devaluation. Moreover, the 2026 state budget law sets the projected dollar exchange rate at 45.7 hryvnia per dollar. This can be seen as a benchmark for budget balancing. But devaluation can help more than just the budget. Alexander Savchenko, professor and rector of the International Institute of Business, reminds us of this.
“The hryvnia will gradually move towards the benchmark set in this year’s budget. Moreover, the International Monetary Fund is in favor of a slow devaluation of the hryvnia. This should help Ukrainian exporters by making their products more competitive,” the expert emphasizes.
In short, nothing special. As is well known, under the managed flexibility policy, the Ukrainian national currency is allowed to fluctuate. The main thing is that there are no sharp movements.
Author: Serhiy Vasilevich
