The Ukrainian Treasury lost ₴45M in the first month after introducing a flexible exchange rate.

The State Treasury’s hryvnia revenues from the sale of foreign currency following the abolition of the fixed dollar exchange rate were ₴45.18M less than they could have been if the exchange rate had remained fixed at ₴36.6 per $1.

From October 2 (when the NBU announced the transition to a flexible official rate regime) to October 31, 2023, Ukraine received $1.15B in US grants and €1.5B in macro-financial assistance from the EU. At the same time, the government used only part of this amount, namely $970M and €433M, for budget calculations. The remaining foreign currency receipts remained in the budget’s foreign currency accounts.

After October 2, the official dollar rate began to fluctuate, and for most of the last month, its value was lower than before the changes to the fixed exchange rate policy. Therefore, by converting currency funds, the government received less hryvnias to finance budget expenditures.