Ukrainian budget declaration sees exchange rate falling to UAH 44.8/$1 at end-2026, UAH 45.8/$1 at end-2028

MOSCOW. July 1 (Interfax) - The hryvnia will fall to UAH 44.8/$1 by the end of 2026 and to UAH 45.8/$1 by the end of 2028 according to the 2026-2028 budget declaration, approved by the Ukrainian government on June 27, Ukrainian media quoted the document, posted on the government website, as saying.

"The situation currency market situation remains managed -the average exchange rate for May was UAH 41.5/$1, and the average for 2024 was UAH 40.2/$1," the declaration says.

The government assumes the exchange rate will be UAH 44.8/$1 at the end of 2026, UAH 45.3/$1 at end-2027 and UAH 45.8/$1 at end-2028.

The average rates for the period are similar at UAH 44.7/$1 for 2026, UAH 45.2/$1 for 2027 and UAH 45.6/$1 for 2028.

The euro has risen to new highs against the hryvnia for three days in a row as the hryvna has fallen against the dollar and the dollar has fallen against the euro.

The budget declaration envisages that the budget deficit will narrow from a planned 19.4% of GDP this year to 9.9% in 2026, 5.2% in 2027 and 3.8% in 2028.

"The state budget will be financed in 2026 partially with government borrowing in 2025 over and above amounts projected by the 2025 state budget, which will make it possible to ease the burden on the domestic government securities market," the declaration says.

The deficit should decrease from UAH 1.64 trillion in 2025 to UAH 1.03 trillion in 2026, UAH 0.62 trillion in 2027 and UAH 0.51 trillion in 2028.

The budget would be financed with government borrowing given the receipt of financial assistance from international partners and domestic capital market capacity and available liquidity.

Annual privatization revenue of UAH 2 billion is planned for the three years.

"Debt sustainability will be ensured by lowering public debt and state-guaranteed debt to not more than 100% of GDP by the end of 2028," the declaration says.

If the crisis is prolonged, the budget deficit could be increased at talks with the IMF and other international partners that Ukraine relies on for external funding.