Ukraine has recorded a new historic minimum of the hryvnia to the US dollar. According to the National Bank of Ukraine, the official hryvnia exchange rate was UAH 42,2841 per dollar, which was the lowest indicator in the history of national currency.
It is the sixth day in a row when the hryvnia shows a fall in the foreign exchange market, which attracts the attention of both experts and the public. The fall of the national currency has serious economic consequences, and analysts note several key causes of this phenomenon. One of the main reasons that affects the value of the hryvnia is the increased demand for foreign currency. Increasing demand for dollar and euro in terms of economic uncertainty forces the national currency to lose its value. Also an important factor is the high level of inflation in Ukraine. Inflation pressure worsens economic conditions, which contributes to the weakening of the hryvnia. According to economists forecasts, inflation increases can further increase instability in the foreign exchange market, as well as affect the purchasing power of citizens.
The low hryvnia rate has a serious impact on the Ukrainian economy. One of the most prominent effects is the rise in price of imported goods and services. In the face of increasing the dollar, the prices for fuel, equipment, products and other imported goods are significantly increased, which leads to an even greater increase in inflation. In addition, the high exchange rate of the dollar is reflected in the debt load of the state. At the end of 2024, Ukraine's national debt exceeded 7 trillion hryvnias, which puts additional burden on the country's economy, since most of this debt is expressed in foreign currency. The depreciation of the hryvnia can make this debt maintenance even more complicated and costly. Experts note that in order to stabilize the situation in the foreign exchange market, it is necessary to implement complex economic measures. This includes the fight against inflation, export support, improving investment climate and strengthening the country's financial institutions.
Among the possible steps of the Government and the National Bank of Ukraine are the continuation of the use of monetary instruments to support the hryvnia and attract international financial resources to reduce debt load.
