Euro's role growing in Ukraine, but dollar remains currency that determines exchange rate - NBU

MOSCOW. April 17 (Interfax) - The constructive ambiguity approach the National Bank of Ukraine (NBU) continues to pursue on the foreign exchange market almost equally applies to the dollar and to the euro, Ukrainian media quoted NBU Deputy Governor Vladimir Lepushinsky as saying.

"The exchange rate to the euro/dollar pair has changed quite significantly over the past few years since tariff wars began. Our forex market has also been affected by these changes [...] When such global rate changes occur, we often follow the same trajectory as other currencies, given this unique status of the dollar as a 'safe haven'," Lepushinsky said when commenting on periods of the Ukrainian hryvnia exchange rate's lower volatility to the euro than to the dollar.

If the euro globally slides versus the dollar, some importers become more active, as they benefit from buying the euro now for payments under contracts, Lepushinsky said. At the same time, exporters that have euros refrain from selling them in the hope that the exchange rate will change.

"However, the dollar remains the currency for now that determines our exchange rate. The hryvnia-dollar exchange rate is calculated based on market trading, and we align fluctuations with it. The hryvnia's exchange rate to other currencies is then established through cross rates," Lepushinshky said.

Though the euro's role has gradually been growing, the dollar remains the dominant currency today, he said.

"As for imports, it is almost parity, but the situation is different in exports because we trade in commodities, and settlements for them take place mainly in dollars. However, this situation is gradually changing, and the euro will become the currency defining the exchange rate in the future, which is in line with our European integration aspirations. But it will take time," Lepushinsky said.

The NBU is making the exchange rate more flexible in a step-by-step manner in order to allow the exchange rate to become more responsive to developments on the marker, but this gradual transition is linked to the need to maintain the forex market's sustainability in order to keep expectations manageable, he said.

"We need two-way exchange rate fluctuations," Lepushinsky said, adding that if the exchange rate moves only in one direction, the ambiguity element disappears, resulting in excessive forex demand, because the logic is: buy today in order not to buy at a higher price tomorrow.

"This element should be eliminated in order to be able to maintain ambiguity on the market as to in which direction the exchange rate will move, because when there is two-way movement of the exchange rate, one can buy and lose," Lepushinsky said when explaining why constructive ambiguity is important.

Enhancing the exchange rate's flexibility is a key benchmark that shows that the market is developing, he said.

"In our country, the market is playing an increasingly bigger role in determining the exchange rate. Even for me, it is unrealistic to predict the exchange rate for the following day, week or month, because the market's influence is significant. Our exchange rate trajectory is not predetermined in advance. Professional market players don't have clear understanding as to where the exchange rate is going to move," he said.

The share of forex market operations without the NBU grew by 6 percentage points to 53% in 2025, whereas it was below 30% prior to the transition to the policy of managed exchange rate flexibility, Lepushinsky said.

The NBU's publication of its forex market intervention results on a weekly basis makes it more difficult for external experts to analyze data, because the situation and consequently the exchange rate trajectory may change seriously within one week, even within one day, but the regulator does so purposely, including in order to create constructive ambiguity, he said.