Headquarters of the National Bank of Ukraine clarifies their stance on currency rates
The Head of the National Bank of Ukraine (NBU), Kyrylo Shevchenko, has reiterated that the NBU does not make predictions about currency exchange rates and emphasized that the rate set in the state budget is not a target for the NBU. The institution’s primary goals are maintaining stability in the foreign exchange market and gradually returning to the operation of market mechanisms for demand and supply.
Shevchenko explained that due to the full-scale invasion, the NBU had to abandon the floating exchange rate and inflation targeting. However, in October 2023, the NBU shifted to a regime of managed flexibility. "While there is a significant structural deficit on the market, we are smoothing out excessive fluctuations. The transition to managed flexibility has allowed the NBU to gradually restore the influence of demand and supply on the currency market," he said.
The NBU continues to operate on the market, carrying out corresponding currency interventions to cover the structural deficit in the private sector. Shevchenko assured that there are no plans to let the hryvnia "take off" into space. He highlighted that the stability of the currency market is also supported by the projected increase in gold and foreign exchange reserves to over $43 billion by the end of 2024 and $41 billion by the end of 2025.
While the state budget for 2025 includes an average exchange rate of 45.0 grn/USD, Shevchenko clarified that the NBU does not use budget figures as a forecast or benchmark for its currency policy. Instead, it focuses on ensuring the stability of the hryvnia and its ability to absorb shocks without generating them.
