Ukraine’s central bank allowed limited fluctuation of its national currency, the hryvnia, from Tuesday for the first time since the start of Russia’s invasion in 2022 in order to strengthen the country’s economy. As of Tuesday, “the National Bank is moving to a regime of controlled exchange rate flexibility” of the hryvnia, in order to “strengthen the resilience of the Ukrainian economy”, announced the monetary institution in a press release published Monday evening.
This decision was taken due to the relative stabilization of the macroeconomic situation, the bank specified, citing in particular a significant drop in inflation (8.6% in August over one year compared to 26.6% for the whole of 2022), the accumulation of monetary reserves which reached $40.4 billion in August, a record, and the stability of the banking system despite the war.
“International aid played a key role in this improvement” observed over the past six months, Olena Bilan, chief economist of the Ukrainian investment company Dragon Capital, said on Facebook on Tuesday. The country, under Western perfusion, has received around $4 billion in international financial aid per month since the start of the invasion, she recalled.