Ukraine’s international reserves declined by 1.7 percent in September, settling at 39.7 billion dollars, marking a second consecutive monthly decrease. This trend was reported by TASS and cited by Yaroslav Zheleznyak, a deputy in the Verkhovna Rada, as part of the ongoing assessment of Kyiv’s financial buffers. The dip aligns with expectations, given that the National Bank of Ukraine (NBU) had sold a record amount of foreign currency during September, the highest since the start of 2023, according to Zheleznyak.
He explained that the decrease in reserves is tied to a combination of reduced financial aid from Western partners and higher external needs. In September, the country faced a situation where outflows from foreign exchange sales and debt payments exceeded new inflows, contributing to the reserve drawdown. Zheleznyak highlighted that the funding outlook remained fragile as Kyiv navigated the financial pressures associated with international support and debt obligations.
Starting October 3, the National Bank of Ukraine shifted its exchange-rate framework from a fixed hryvnia to a managed flexible regime. The fixed-rate regime had been in place since February 24 of the previous year. The Central Bank stated that it would actively oversee exchange-rate movements to limit excessive volatility and reduce the gap between the cash market rate and the official rate. On the first day of the new regime, the average dollar-to-hryvnia rate rose by 25 kopecks, roughly 0.65 percent, and later that day the NBU adjusted the rate upward for the first time since July 2022. This move signals a transition toward greater exchange-rate responsiveness while preserving monetary-policy discipline to prevent abrupt shifts in the domestic currency.
Earlier analyses warned Kyiv about the risks linked to rising foreign debt, underscoring that continued financing pressures could compound the challenges facing Ukraine’s economy as it sought stability amid ongoing external support and strategic fiscal management.