The euro has surged past 52 hryvnia: should Ukrainians panic?
16 June 14:39
ANALYSIS 
The official euro exchange rate in Ukraine has surpassed the psychological threshold of 52 hryvnia. This marks a new all-time high for the euro against the hryvnia.
Euro above 52 UAH: what happened to the exchange rate
As of June 16, the official euro exchange rate stands at 52.04 UAH. The U.S. dollar remains at 44.82 UAH, and the Polish zloty at 12.26 UAH.
The euro has risen more sharply than other currencies. This has raised the question: does this movement signal the start of a sustained devaluation of the hryvnia, or is it merely a short-term fluctuation in the currency market?
Economists explain that the euro-to-hryvnia exchange rate depends largely on the euro-to-dollar ratio in the international market. In other words, if the euro appreciates against the dollar, this is automatically reflected in the euro-to-hryvnia exchange rate.
Andriy Novak: There are no signs of systemic devaluation yet
Economist Andriy Novak in an exclusive comment
“Today we are observing fluctuations in the hryvnia’s exchange rate against hard currencies, but we see that these fluctuations are mixed across different trading days in the foreign exchange market. And right now, it is still impossible to identify a clear trend or determine whether we are experiencing a systemic devaluation or revaluation of the hryvnia. On one trading day, the hryvnia loses value; on the next, it recovers slightly,” explained Andriy Novak.
According to the economist, the hryvnia’s exchange rate against the euro and the dollar is linked to the global interrelationship between hard currencies.
“As for the exchange rates against the euro and the dollar, these rates are linked in our market. Differences can also occur on a daily basis depending on the supply and demand for specific currencies in the market. But overall, the dollar and the euro, as well as other hard currencies, move in tandem and reflect each other’s exchange rates on the global market,” Novak noted.
He added that the hryvnia exchange rate only partially reflects the domestic situation and largely mirrors global currency trends.
READ ALSO: Will the dollar reach 50 UAH? An economist assesses the risks for the hryvnia
Why the euro may rise on certain days
Andriy Novak explains that on certain trading days, demand for the euro specifically may rise in the Ukrainian market. For example, if a business needs to make purchases in Europe, this temporarily increases demand for the European currency.
“For example, on a certain trading day, someone has increased demand because they need to buy something in Europe, so there is increased demand for the euro—and on that trading day, the euro exchange rate rises slightly. On another day, this demand is absent, and the exchange rate either returns to normal or remains unchanged,” the economist said.
In his opinion, the current range of fluctuations is not critical.
“Right now, the amplitude of fluctuations in Ukraine’s currency market is very insignificant and does not yet indicate any crisis phenomena or trends,” Novak emphasized.
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Oleg Pendzin: The euro exchange rate depends on the dollar/euro pair
Economist Oleg Pendzin in an exclusive comment
“This is directly linked to the dollar/euro exchange rate. You saw that the European Central Bank raised its key interest rate, didn’t you? It made the euro more expensive. The euro’s exchange rate against the dollar automatically jumped,” Pendzin noted.
According to him, after the euro strengthens against the dollar, the European currency automatically becomes more expensive relative to the hryvnia as well.
“It automatically jumps against the hryvnia. Because at the moment, the National Bank determines the hryvnia’s exchange rate only against the dollar. All other currencies are calculated using the cross-rate,” the economist explained.
Why the dollar is easier to predict
Oleg Pendzin notes that the dollar-to-hryvnia exchange rate is easier to predict, since the National Bank directly sets the hryvnia’s exchange rate against the dollar.
“It all depends entirely on the dollar/euro currency pair. In other words, making any predictions about where it’s headed is a thankless task. It’s easier with the dollar because the National Bank sets the hryvnia’s exchange rate only against the dollar. Everything else is calculated based on the cross-rate,” said Pendzin.
In other words, the euro can appreciate even when the dollar-to-hryvnia exchange rate remains relatively stable. This happens due to changes in the euro-to-dollar ratio on the international currency market.
Should Ukrainians panic over the euro exchange rate?
Experts see no reason to panic just because the euro has crossed the 52 UAH mark. According to Andriy Novak, the current fluctuations do not yet indicate a systemic devaluation of the hryvnia.
The exchange rate may fluctuate due to currency demand, the situation on global markets, central bank actions, import payments, and currency expectations among businesses and the public.
At the same time, the rise of the euro has practical implications for Ukrainians. It can affect the cost of travel to the EU, imported goods, education, rent, medical treatment, or other payments in the European currency.
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