This is reported by RBK-Ukraine, referencing the "Inflation Report" from the National Bank of Ukraine (January 2025). This information is provided by Contracts.UA.
According to the NBU, demand for foreign currency significantly increased in the IV quarter of 2024. Among the key factors were record-high budget expenditures, which were largely financed by incoming international financial assistance.
Additionally, there was an uptick in purchases by importers of certain consumer goods, and transaction volumes for businesses, permitted under the liberalization of currency restrictions, increased.
"Under these conditions, responding primarily to the increase in structural currency deficit from the private sector at the end of the year, the NBU raised net foreign currency sales to $11.4 billion in the IV quarter (compared to $9.2 billion in the III quarter). This helped to calm market participants' expectations, especially households, and contributed to stabilizing demand in the cash segment," the NBU explained.
As a result, the difference between the cash and official exchange rates in the IV quarter was minimal - around 1%, the NBU reported.
Expectations for 2025
It is anticipated that in 2025 Ukraine will receive $38.4 billion in external financing. "Given the expected volumes of international financial assistance in 2025, the NBU's high capacity to offset the structural currency deficit in the private sector and smooth out excessive exchange rate fluctuations will continue," the NBU stated.
The resilience of the currency market will remain a crucial element in maintaining manageable expectations among economic agents and returning inflation to the target of 5%, the NBU added.
Structural Deficit
According to the NBU's estimates, the structural currency deficit of the private sector will remain significant in 2025, but is expected to gradually decrease. As the economy normalizes and currency liberalization continues, investments and debt capital inflows to the private sector will increase. Export revenue is also expected to rise due to gradual increases in global grain prices and a certain boost in agricultural crop yields.
Currency Interventions
It is worth noting that the National Bank of Ukraine sold $5.3 billion on the interbank currency market in December 2024. This is the highest monthly volume in history. Overall, for 2024, the NBU sold $34.8 billion on the interbank market, which is $6.2 billion more than in 2023.
However, in 2024, Ukraine received $42 billion in international assistance, which compensated for the NBU's expenditures.
The dollar exchange rate increased by 10.7% to 42.03 hryvnias in 2024.