Contents of the article
- What is the hryvnia exchange rate?
- What affects the hryvnia exchange rate?
- Why the dollar and euro exchange rates may move differently
- Is there seasonality in the foreign exchange market?
- Is it possible to predict the dollar exchange rate?
- Exchange rate in the State Budget: should you use it as a reference?
- How to protect your savings amid currency fluctuations
- Conclusion
- Frequently asked questions
The exchange rates of the dollar, euro, and other foreign currencies have traditionally been among the topics that most interest Ukrainians. Changes in the currency market affect more than just the cost of traveling abroad or purchasing imported goods. Fuel prices, the cost of appliances, medications, and some food products, as well as the country’s overall inflation rate, all depend on exchange rates.
That is why many people are trying to understand what influences the dollar exchange rate, why the hryvnia exchange rate fluctuates, and how to protect their savings amid economic uncertainty.
It is important to understand that exchange rates are shaped by a whole system of economic processes. Individual news stories or statements may cause short-term fluctuations, but in the long run, fundamental factors — the state of the economy, export and import volumes, inflation, international trade, investment, and central bank policy — are decisive.
What is the hryvnia exchange rate?
The hryvnia exchange rate is the ratio of the value of the Ukrainian currency to the currencies of other countries. Most often, Ukrainians track the hryvnia’s exchange rate against the U.S. dollar and the euro, as these currencies play a key role in international trade, savings, and investments.
Like any other commodity, currency has its own price. It is determined by supply and demand in the market. If demand for foreign currency grows faster than its supply, the hryvnia may weaken. If, on the other hand, more currency enters the market than is needed for current transactions, this creates the conditions for the national currency to strengthen or, at the very least, to remain stable.
What affects the hryvnia exchange rate?
Many factors influence the foreign exchange market simultaneously. Some of them are at play on a daily basis, while others shape long-term trends that can persist for years.
The state of the country’s economy
A strong economy typically creates more favorable conditions for the stability of the national currency.
The hryvnia exchange rate is influenced by economic growth rates, production volumes, the development of entrepreneurship, employment levels, and investment activity. When businesses are operating, creating added value, and paying taxes, the economy receives more resources for development, and the financial system remains more stable.
At the same time, economic difficulties can increase pressure on the foreign exchange market and create conditions for exchange rate fluctuations.
Exports and imports
One of the most important factors affecting the dollar exchange rate in Ukraine is the balance between exports and imports.
When Ukrainian companies sell their products abroad, foreign currency proceeds flow into the country. A portion of this currency is sold on the domestic market to cover expenses in hryvnia: payroll, taxes, purchases of materials, and other operational needs. This increases the supply of foreign currency and supports the hryvnia exchange rate.
Conversely, Ukrainian companies need foreign currency to purchase imported goods. The larger the volume of imports, the higher the demand for dollars and euros.
Agricultural exports are of particular importance to Ukraine, as agricultural products traditionally remain one of the country’s largest export categories and account for a significant portion of the country’s foreign exchange earnings. That is why harvest yields, global prices for agricultural products, logistical capabilities, and access to foreign markets can affect not only the agricultural sector but also the foreign exchange market as a whole.
Successful exports of Ukrainian grain, vegetable oil, and other agricultural products mean an additional inflow of foreign currency into the economy, which contributes to the stability of the hryvnia. That is why the foreign exchange market and the state of Ukraine’s export sectors are closely intertwined.
Decisions of the National Bank of Ukraine
The National Bank of Ukraine plays a key role in maintaining the stability of the foreign exchange market.
To this end, the NBU uses a number of tools, including:
- foreign exchange interventions;
- the discount rate;
- regulation of the banking system;
- management of international reserves.
For example, if demand for foreign currency temporarily spikes, the NBU may sell a portion of its foreign exchange reserves to smooth out excessive exchange rate fluctuations.
At the same time, the regulator’s primary task is not to fix a specific exchange rate, but to ensure the stability of the financial system and curb excessive volatility.
Inflation
Inflation refers to a general rise in the prices of goods and services.
If inflation remains high for an extended period, the purchasing power of money gradually declines. This can also affect the exchange rate, as economic actors begin to seek instruments to protect their funds from depreciation.
That is why maintaining controlled inflation is one of the key tasks of central banks around the world.
International aid and investment
International financial aid, loans from international organizations, and investments remain an important source of foreign exchange earnings for modern Ukraine.
These funds support macrofinancial stability, help finance government spending, and contribute to replenishing the country’s foreign exchange reserves.
At the same time, this factor is important not only for Ukraine. For any economy, the volume of investment and the confidence of international partners remain key indicators of its resilience and development prospects.
Military and geopolitical risks
Full-scale war has been having a significant impact on Ukraine’s economy for several years in a row. It affects manufacturing, logistics, investment activity, exports, and public finances.
However, even under such conditions, the hryvnia exchange rate is determined not by individual news stories or events, but by a combination of many economic factors. That is why changes in the foreign exchange market are often the result of long-term processes, rather than an immediate reaction to a specific event.
Why the dollar and euro exchange rates may move differently
Many people notice that the dollar and the euro do not always appreciate or depreciate at the same time. Sometimes the dollar’s exchange rate remains virtually unchanged, while the euro rises significantly. The opposite can also happen.
The reason is that there is also a specific exchange rate between the dollar and the euro, which is determined on the global market. It is influenced by the economic situation in the U.S. and European Union countries, central bank decisions, inflation rates, economic growth rates, and investor expectations.
Therefore, changes in the euro exchange rate in Ukraine depend not only on Ukrainian factors but also on the relationship between the euro and the dollar in international markets.
Is there seasonality in the foreign exchange market?
It is impossible to predict exchange rates with complete accuracy, but certain seasonal trends may recur in the foreign exchange market.
For example, at the beginning of the year, demand for foreign currency from importers often increases, while exporters’ foreign currency revenues may temporarily decline. This can put additional pressure on the hryvnia.
At the same time, in the second half of the year, when export volumes traditionally increase — especially for agricultural products — the supply of foreign currency in the market often rises. This can help maintain the hryvnia’s stability.
However, seasonality is just one of many factors. Its impact may be weaker or even imperceptible, depending on the state of the economy, foreign trade, decisions by the National Bank of Ukraine, and other developments.
Is it possible to predict the dollar exchange rate?
It is impossible to accurately predict future exchange rates. Forecasts by banks, economists, and international organizations are based on current data and certain assumptions about economic developments. However, any forecast remains just one of many possible scenarios.
Dozens of factors can influence the exchange rate, some of which cannot be predicted in advance. That is why attempts to guess the most favorable moment to buy or sell currency often do not yield the expected result.
Many people postpone buying or selling currency, hoping for a more favorable exchange rate. However, even the most well-founded forecasts cannot account for all the factors that will influence the currency market in the future. Therefore, for most people, it is more important not to try to predict the next move in the exchange rate, but to build a savings strategy that will remain stable under various economic scenarios.
Exchange rate in the State Budget: should you use it as a reference?
When preparing the State Budget, the government uses forecast macroeconomic indicators, including an assumption about the average UAH-to-USD exchange rate. The 2026 budget calculations use an average exchange rate assumption of UAH 45.7 per USD.
It is important to understand that UAH 45.7 per dollar is not an official fixed rate and does not guarantee what the exchange rate will be at banks or on the foreign exchange market. The Ministry of Finance explicitly describes this figure as an “assumption” in the macroeconomic forecast. It is used for state budget planning and calculations, including estimating revenues affected by exchange rates and converting foreign-currency indicators of public finances.
Therefore, the budget exchange-rate assumption should not be treated as a forecast of the future dollar rate for households. The actual exchange rate is shaped by supply and demand in the foreign exchange market, the state of the economy, foreign trade, inflation, international inflows and decisions of the National Bank of Ukraine. As a result, the actual rate during the year may be either lower or higher than the assumption used in the budget.
How to protect your savings amid currency fluctuations
When exchange rates fluctuate, many people try to find the “right moment” to buy dollars or euros. However, it is practically impossible to predict what the exchange rate will be in a month or even a few weeks. Therefore, instead of trying to guess the next move in the exchange rate, it’s better to focus on how to manage your savings.
Diversify your savings
Keeping all your funds in a single currency or a single financial instrument increases your savings’ exposure to fluctuations in that specific market. Spreading your funds across different currencies and financial instruments can reduce the impact of individual economic risks.
For example, you can keep part of your savings in hryvnia and part in foreign currency. At the same time, some funds can remain accessible for day-to-day needs, while others can be invested for a fixed term to generate income.
It’s important that this allocation aligns with your financial goals, savings time horizon, and need for access to funds.
Consider when you might need the money
Funds that you may need in the near future should be kept in a form that allows you to access them quickly.
If, however, a certain amount won’t be needed for several months or longer, you can consider instruments that involve placing funds for a fixed term and generate additional income.
You can place part of your savings in a deposit account
If you do not plan to use the funds in the near future, a bank deposit may be one option. Hryvnia deposits typically offer higher returns than foreign currency deposits, so the accrued interest can partially offset the impact of inflation on the purchasing power of your savings.
Before opening a deposit account, you should consider not only the interest rate but also the term of the deposit, the conditions for early withdrawal, and the option to add funds, if that’s important for your goals.
If you’re saving foreign currency, you don’t have to keep it in cash
You can purchase foreign currency electronically and keep it in a bank account. This method allows you to avoid some of the risks associated with physically storing large amounts of cash.
At the same time, the choice between cash and non-cash forms depends on what the funds are intended for, how quickly you might need them, and which method is more convenient for you to use.
Don’t try to predict the exchange rate
Even if the exchange rate moves in a certain direction over the course of a few days or weeks, this does not mean that the trend will continue. The foreign exchange market is influenced by many factors simultaneously, some of which are impossible to predict in advance.
Therefore, it’s best to make decisions about buying currency or investing your savings based on your own financial goals, rather than solely on the current exchange rate or a single forecast.
The main principle is not to try to predict every movement of the currency market, but to create a savings structure that meets your needs and remains viable under various economic scenarios.
Conclusion
The hryvnia exchange rate depends on many interrelated factors: the state of the economy, foreign trade, inflation, decisions by the National Bank of Ukraine, international aid, investments, and the overall economic situation in the country.
Export revenues are of particular importance to Ukraine, especially those from the agricultural sector, which remains one of the key sources of foreign currency inflows.
It is impossible to accurately predict the future exchange rate of the dollar. Agroprosperis Bank recommends structuring your savings plan in such a way that it remains stable under various economic scenarios: diversify your funds, use reliable financial instruments, and focus on long-term financial goals.
It is precisely this approach that helps not only to react more calmly to currency market fluctuations but also to more effectively preserve the purchasing power of one’s savings.
Frequently asked questions
Why is the dollar exchange rate rising in Ukraine?
The dollar exchange rate may rise when demand for foreign currency exceeds its supply. This can be influenced by an increase in imports, a decline in exports, accelerating inflation, changes in economic expectations, or external economic and political factors.
What has the greatest impact on the hryvnia exchange rate?
The hryvnia exchange rate is most influenced by the balance of exports and imports, inflation, the policies of the National Bank of Ukraine, international financial assistance, and the overall state of the economy.
Why can the dollar exchange rate fluctuate even without major news?
The foreign exchange market reacts not only to events but also to the expectations of businesses, banks, and the general public. In addition, currency supply and demand fluctuate daily due to foreign trade, international payments, and financial transactions.
Should you keep all your savings in dollars?
Keeping all your funds in a single currency increases risk. Agroprosperis Bank recommends diversifying your savings based on your personal financial goals, savings time horizon, and liquidity needs.
Which is better for savings: cash or a deposit?
These instruments serve different purposes. Cash can be part of a diversified savings portfolio, while a deposit allows you to earn interest on your funds. The optimal solution depends on your individual financial goals and liquidity needs.
Can the National Bank fully control the hryvnia exchange rate?
The National Bank has tools to smooth out excessive fluctuations and maintain financial stability. However, even the central bank cannot completely eliminate the influence of fundamental economic factors that shape the exchange rate in the long term.
How can you protect your money during exchange rate fluctuations?
There is no one-size-fits-all solution. Agroprosperis Bank recommends diversifying savings across different instruments and currencies, as well as considering the time horizons for which funds are to be invested. It is important not to make financial decisions based solely on short-term exchange rate fluctuations and to focus on your own financial goals.
