Ukraine Sets Flexible Hryvnia Policy With Active Central Bank Market Involvement

In Ukraine, the national monetary authorities signaled a shift in how the hryvnia is managed, moving away from a fixed rate approach toward a system that embraces flexible, market-driven movements. The central bank’s communications indicate that this new regime will be characterized by deliberate, policy-guided adjustments rather than rigid targets. The central bank outlined that this managed exchange rate framework will be monitored closely, with active participation in the foreign exchange market to keep fluctuations within reasonable bounds and to support overall financial stability. The bank will engage in interbank trading to help address a structural shortfall in foreign currency and to dampen excessive volatility in the hryvnia. At the same time, exchange rates for consumer and business transactions will continue to follow a transparent set of rules that align with those used during the recent period, allowing market participants to buy and sell foreign currency in a way that reflects prevailing conditions in cash markets and bank conversions. The central bank added that it will strive to narrow the gap between cash rates and official rates, contributing to a more coherent and predictable pricing environment for all market players.