100% Surge in Ukraine’s Currency Deficit Noticed – Sky Bulletin

Ukraine’s national currency, the hryvnia, has experienced unprecedented lows before somewhat recovering. The National Bank of Ukraine has responded to the intensifying currency gap by doubling its dollar sales from national reserves. Consequently, there was a notable spike in the dollar exchange rate, as revealed by the National Bank of Ukraine’s (NBU) statistics. During the period of February 19 to February 23, 2024, the NBU’s sales hit $647.83 million in the interbank currency market — a figure that is double the $322.3 million of the preceding week. The interbank exchange rate rose by over 60 kopecks, settling at ₴38.60 to the dollar at the onset of the week. A new record was set by the official dollar exchange rate, which peaked thrice in succession, reaching ₴38.62 to the dollar on February 22. However, a decrease followed this peak. The exchange rate dropped later in the week, with the official rate falling from ₴37.97 to ₴37.35 for one dollar. On the cash market, the rate initially escalated from ₴38.10 to ₴38.85 for one dollar.

Ukraine’s financial stability has been tested as the hryvnia reached record-low levels against the dollar due to a substantial currency deficit. The central bank’s intervention to sell a significantly higher amount of dollars from its reserves demonstrates the intense pressure on the local currency. Despite this move, the rate did experience a temporary climb, setting historical records before descending later in the week. It is a clear indication of the volatile economic situation in Ukraine, with potential ramifications for businesses, consumers, and the broader economy. Monitoring the hryvnia’s performance and the NBU’s strategies will be fundamental in forecasting the financial landscape of the country.