The grivna is expected to slide further in the coming weeks, local media say
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Ukraine’s national currency, the grivna, dropped to 41.83 to the US dollar on Tuesday, according to data from the National Bank of Ukraine (NBU). The figure is a record low, multiple media outlets reported.
The devaluation of the Ukrainian currency could be a result of an easing of foreign currency controls by the regulator, noted online outlet Strana.ua.
The weakening of the grivna also follows a rejection by Kiev of a proposal to hold a ceasefire over Christmas, and the assassination of the head of Russia’s Radiological, Chemical, and Biological Defense Forces in Moscow, which is believed to have been carried out by Ukraine. Moscow has accused Kiev of resorting to terrorist tactics due to its military failures.
Over the past year, the grivna has lost over 13% of its value. Since the start of the Ukraine conflict in February 2022, the currency has devalued by over 44%.
Previously, the exchange rate of the Ukrainian grivna reached a record low of 40.69 per $1 in mid-June. The fall followed the central bank’s decision to cut the key rate by 0.5 percentage points to 13%.
The Ukrainian currency is expected to fall further to 42.10 grivna to the dollar, the rate set in the state budget for the end of 2024, noted Strana.
“The government needs to make a lot of social payments at the end of the year, so it wants to get more grivnas for the dollars and euros it received from international partners,” the treasury director of one major Ukrainian bank told the publication.
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The European Union has been providing billions of euro in financial support to Kiev through its Ukraine Facility. The United States has given at least $26.8 billion in budget support to the government of Ukraine since 2022.