Review and Forecast of the Hryvnia Exchange Rate Against Key Currencies by KYT Group Analysts

In August of 2026, the Ukrainian hryvnia showed a notable strengthening in the country's foreign exchange market. The official exchange rate began at 44.69 UAH per dollar but had dropped to 44.55 UAH/USD by August 31. The National Bank of Ukraine (NBU) had been actively intervening in the market, spending over $4.6 billion during the month to maintain stability, with the total interventions reaching $14.4 billion from June to August.

The demand for foreign currency was not decreasing but growing, driven by the consequences of Russian attacks on domestic businesses, particularly in the energy sector. This demand will continue to put pressure on the hryvnia throughout the fall, with the NBU defending its stability through further interventions.

The economic situation in Ukraine is deteriorating due to the enemy's military operations aimed at destroying the country's economic prospects. Large businesses have suffered multi-billion losses following aggressive attacks on factories, warehouses, stores, and gas production facilities. A naval blockade has also emerged, making it difficult to export agricultural products by sea, potentially causing losses of up to $12 billion in the agricultural sector. This will affect foreign exchange market volumes and may accelerate devaluation in the fall.

Global market uncertainty continues, with the Federal Reserve's interest rate forecast constantly changing. Fed Chair Kevin Worsh's recent speech reaffirmed the commitment to fighting inflation, leading to an increased likelihood of a 25-basis-point rate hike at the September 15–16 meeting. Inflation in the U.S. has consistently exceeded the Federal Reserve's 2% target, fueling debate over whether the central bank should hold rates steady or raise them.

The EUR/USD pair has been trending toward a weaker dollar, beginning at 1.1536 USD/EUR but experiencing a trend reversal to 1.1706 USD/EUR before returning to 1.1587 USD/EUR by August 31.

The war in the Middle East continues to affect economies and contribute to fluctuating oil prices. There is increasing talk of economic pressure on Iran through sanctions, with President Donald Trump expressing no interest in renewing the June interim agreement with Iran. The situation in the Middle East has reached an impasse, with predictions of a lasting ceasefire or clear agreements becoming increasingly rare.

The trade balance is in deficit, with imports totaling $58.1 billion and exports at $24.1 billion over the first seven months of 2026. The NBU has carried out interventions amounting to $43.4 billion during the same period.

Despite economic challenges, the Ukrainian government continues to receive substantial funding from partners to combat Russian aggression, social programs, and national defense. In August, the European Commission approved a new defense support package for Ukraine worth 6.1 billion euros, focusing on air defense systems, missile defense systems, radars, missiles, and ammunition.

The NBU expects a record amount of foreign aid this year—$87 billion—allocated to social programs, infrastructure reconstruction, and weapon production. However, economic growth may be hindered by ongoing attacks on ports, warehouses, and production facilities. Inflation remains a concern, with a year-over-year increase to 7.7% in July and a month-over-month rise of 0.3%.