Number of dollar exchange operations down, interest in euro, zloty, pound grows in Ukraine in 2024
MOSCOW. Feb 4 (Interfax) - The share of Ukrainian citizens' foreign currently exchange operations with U.S. dollars decreased to 74.1% in 2024 from 78.7% the year before, while the number of such operations with euros, Polish zloty and British pounds went up in the reporting period, Ukrainian media said, citing KYP Group's forex market analysis using data from 100 exchange offices in 30 major cities of Ukraine.
"The U.S. dollar remains the dominant currency, but its share has decreased, which may indicate the growing role of the euro and other currencies on the forex market," KYT Group analysts said.
The share of foreign currency exchange operations with euros rose to 25.15% in 2024 from 20.8% in 2023. Analysts believe that this dynamics could be due to the large number of economically active Ukrainians immigrating to Eurozone countries, a pickup in Ukraine's foreign trade with EU countries, changes in businesses' payment preferences, or the diversification of household savings.
The number of PLN exchange deals went up by more than 1.5 times in 2024 to 0.56% from 0.36% in 2023, which, according to KYT Group experts, was due to migrant workers' activity and the deepening of business ties between Ukraine and Poland, leading to the growth of financial flows between the two countries.
The number of exchange operations with British pounds almost doubled in 2024 to 0.15% from 0.08% in 2023. Though the share of British pounds in the total number of currency exchange operations remains small, the increase last year was prompted by the expansion of economic ties between Ukraine and the United Kingdom, an increase in cross-border transactions and Ukrainians' strong trust in UK financial tools, the analysts said.
"The reduction of the dollar's share in foreign currency operations does not mean that it is losing its status as the key reserve currency in Ukraine. The high liquidity and stability of the dollar and its global status continue to make it the main capital saving instrument," they said, adding that these changes could have been prompted by attempts of businesses and the population to diversify their forex assets.
"It is particularly relevant amid the changes in the monetary policy of the U.S. and the European Central Bank. If the ECB continues its policy of gradual easing, the hryvnia exchange rate against the euro may remain more stable than against the dollar," the group's analysts said.
The National Bank of Ukraine has already announced its plans to untie the hryvnia from the dollar and peg it to the euro, as Ukraine aspires to join the Eurozone at some point in the future, they said.
"Ukrainians' financial conduct and forex preferences are changing to match today's foreign economic conditions. If this tendency persists, the euro's share in the cash market may continue to grow, while the zloty will stay an important currency for private and business operations," the analysts said.