The devaluation of the national currency against the dollar will continue in 2024.

According to analysis from the ICU: “Given the NBU’s desire for devaluation and increased exchange rate volatility, we have revised the year-end exchange rate forecast to ₴42.3 per $1 compared to the previous forecast of ₴40.7 per $1”.

Changes in the exchange rate are now mainly a reflection of the effect of the NBU’s interventions and not the balance of supply and demand. This approach resulted in a 7% depreciation of the hryvnia relative to the dollar since the NBU switched to a flexible exchange rate regime. This is a moderate devaluation, which did not create noticeable inconveniences for either the population or businesses. It also had a barely noticeable contribution to inflation.

Ukraine’s high level of international reserves allows the NBU to continue to behave proactively in the foreign exchange market. According to estimates, reserves will grow to $45B by the end of the year.

It is expected that the hryvnia’s devaluation will continue to be comparable to the yield on hryvnia savings instruments, which is currently in the range of 11% (rate on hryvnia deposits after taxes) to 16% (rate by annual OVDP).