Ukraine between the dollar and the euro: NBU explains which currency forms the hryvnia exchange rate today
6 October 21:53
The National Bank of Ukraine (NBU) has made a statement on whether Ukraine will change its currency policy benchmark and switch from the dollar to the euro. First Deputy Chairman of the NBU Sergiy Nikolaychuk said this in an interview with Interfax-Ukraine, "Komersant Ukrainian" reports.
According to him, historically, the Ukrainian economy has been primarily focused on the US dollar. The hryvnia-dollar exchange rate was the main indicator of stability, economic expectations, and even public sentiment. For decades, the dollar has remained the main settlement and savings currency for households and businesses. However, recent years, especially after the outbreak of a full-scale war, have significantly changed the balance of power in the foreign exchange market.
Today, a growing number of factors point to an increasingly important role for the euro in the Ukrainian economy. Trade, financial, and political ties with the European Union have become much closer, and international aid is coming mostly in euros. This naturally pushes the government and the National Bank to review the structure of foreign exchange reserves and even to discuss the possibility of changing the exchange rate in the future,” Nikolaychuk explained.
The euro is becoming a key currency in foreign trade
Since the beginning of the war, the European Union has become Ukraine’s main trading partner. The share of European countries in the structure of Ukrainian imports today exceeds 60%, and the upward trend continues. Ukraine imports from the EU not only consumer goods, but also industrial raw materials, equipment, fuel, and medicines, which are critical items for the economy.
Most payments in such transactions are made in euros. Accordingly, businesses and government agencies are increasingly operating in this currency, which is gradually shifting the emphasis in the currency structure of the economy.
In addition, a significant portion of international financial assistance from EU partners, the European Investment Bank, and other European institutions comes in euros. This also affects the currency composition of Ukraine’s international reserves: funds received by the government in euros are accumulated in accounts and automatically become part of foreign exchange reserves, changing their proportion.
Why the dollar remains the main currency
Despite these changes, the NBU emphasizes that the US dollar remains the main currency in Ukraine. Most macroeconomic calculations, including the determination of the hryvnia exchange rate, the assessment of foreign exchange reserves, and the publication of foreign economic indicators, are tied to the dollar.
The reason is simple: the dollar’s global role as the world’s main reserve currency. Most contracts for energy, raw materials, and international trade products are settled in dollars. For Ukraine, as for many other countries, the focus on the dollar is not only a matter of tradition, but also of stability and predictability of financial policy.
However, even in this context, the NBU recognizes that the situation is gradually changing. Certain elements of financial statements are already being duplicated in euros, such as the balance of payments, external debt, and reserves. This is part of the gradual transition to European financial statistics standards.
Read also: Euro vs. dollar: will the leader in the global economy change?
European integration prospects: when can a change take place?
The issue of switching to the euro as the exchange rate currency is not yet on the agenda. The NBU emphasizes that there is currently no specific plan or timeframe. However, in the long run, the euro may play a more important role, especially in the context of Ukraine’s European integration and gradual convergence with EU economic standards.
In the future, as Ukraine integrates into the EU’s single market, it will need to harmonize its foreign economic statistics, financial reporting, and currency benchmarks with those of the EU. This may mean a gradual transition from a dollar-based approach to a euro-based approach.
However, experts emphasize that such a change should be gradual and coordinated with the EU’s monetary policy and internal reforms of the banking sector. Ukraine needs to adapt not only technically but also economically, strengthening its balance of payments, stabilizing inflation, and achieving the projected economic growth.
That is why, despite the growing role of the euro, the dollar remains the main benchmark of Ukraine’s currency policy. However, the vector of development is clear: our financial system is gradually adapting to European standards, and the issue of switching to the euro in the future is only a matter of time.
Дивіться нас у YouTube: важливі теми – без цензури
As the NBU emphasizes, the main thing now is to ensure the stability of the hryvnia, the predictability of the exchange rate, and Ukraine’s effective integration into the EU financial area.
Читайте нас у Telegram: головні новини коротко
