Latest news Ukraine

Ukraine considers shifting currency anchor from dollar to euro

Ukraine launched hryvnia in 1996 with dollar as anchor. This may change as the EU accession talks and the Russo-Ukrainian war reshape strategy.

byYuri Zoria

08/05/2025

3 minute read

ukraine considers shifting currency anchor dollar euro national bank 2016 1090px-national_bank_of_ukraine_new launched hryvnia 1996 change eu accession talks russo-ukrainian war reshape strategy evaluating whether replace reference central governor andriy pyshnyi

National bank of Ukraine in 2016. Photo: Wikimedia Commons/Julia Berezovska

Ukraine considers shifting currency anchor from dollar to euro

Ukraine is evaluating whether to replace the US dollar with the euro as the reference currency for the hryvnia, central bank Governor Andriy Pyshnyi told Reuters in an interview published on 8 May 2025.

The hryvnia, launched in 1996, has historically used the dollar as its anchor. Following Russia’s full-scale invasion in February 2022, Ukraine imposed capital controls and pegged the currency at about 29 to the dollar. This peg was later loosened amid growing fiscal imbalances. In October 2023, Ukraine’s National Bank – the country’s central bank – adopted a managed exchange-rate regime, still using the dollar as a reference for interventions and exchange rate smoothing.

Pyshnyi said the review was prompted by growing integration with Europe, volatility in global markets, and a weakening role of the dollar in the context of international fragmentation.

Potential accession to the European Union, a “strengthening of the EU’s role in ensuring our defense capabilities, greater volatility in global markets, and the probability of global-trade fragmentation” are key reasons driving the reassessment, Pyshnyi said.

Shifting global dynamics

The dollar remains dominant in global trade and reserves, with countries like Saudi Arabia and Hong Kong pegging their currencies to it. But US President Donald Trump’s record-high tariffs imposed on most countries have raised doubts among some about its reserve currency future, according to Reuters.

Since Trump returned to the White House in January, the dollar has declined by over 9% against a basket of leading currencies, as investors increasingly pull back from US assets. Despite this, experts caution against assuming the dollar’s weakness will impact its reserve role, Reuters says.

Moldova, which began EU accession talks alongside Ukraine, officially shifted the reference currency for the Moldovan leu from the dollar to the euro on 2 January 2025.

Ukraine remains heavily dependent on foreign financing amid its ongoing defense against Russia’s invasion. Pyshnyi said the country expects $55 billion in external financing in 2025, which will cover its budget deficit and help build financial reserves for future years. Forecasts project $17 billion in 2026 and $15 billion in 2027, according to him.

Ukraine’s economy could grow by 3.7–3.9% over the next two years, driven by European integration, investment, and stabilization, according to Pyshnyi. He warned that outcomes hinge on the war, and even under favorable conditions, recovery would be gradual.

, Andriy Pyshnyi, hryvnia, euro reference currency, US dollar, Central Bank of Ukraine, European Union accession, Moldova, FX market, Trump tariffs, Ukraine war economy, external financing, de-dollarization, managed exchange rate, Ukraine–EU relations

You could close this page. Or you could join our community and help us produce more materials like this. We keep our reporting open and accessible to everyone because we believe in the power of free information. This is why our small, cost-effective team depends on the support of readers like you to bring deliver timely news, quality analysis, and on-the-ground reports about Russia's war against Ukraine and Ukraine's struggle to build a democratic society. A little bit goes a long way: for as little as the cost of one cup of coffee a month, you can help build bridges between Ukraine and the rest of the world, plus become a co-creator and vote for topics we should cover next. Become a patron or see other ways to support. Become a Patron!

To suggest a correction or clarification, write to us here

You can also highlight the text and press Ctrl + Enter

We are an independent media outlet that relies solely on advertising revenue to sustain itself. We do not endorse or promote any products or services for financial gain. Therefore, we kindly ask for your support by disabling your ad blocker. Your assistance helps us continue providing quality content. Thank you!