NBU Governor comments on exchange rate of hryvnia following talks with IMF

Following the fifth review of the Extended Fund Facility (EFF) Arrangement, the National Bank of Ukraine (NBU) will be working to ensure a greater flexibility of the exchange rate of the Ukrainian hryvnia against the U.S. dollar.

The relevant statement was made by NBU Governor Andriy Pyshnyy on Facebook, an Ukrinform correspondent reports.

Pyshnyy mentioned that Ukraine had reached a staff-level agreement (SLA) with the mission of the International Monetary Fund on the allocation of USD 1.1 billion. Now, this agreement needs to be approved by the IMF Executive Board.

“The exchange rate will continue to function as a shock absorber and help the economy adjust to internal and external changes,” Pyshnyy wrote.

In his words, the National Bank’s policy combined with the managed exchange rate flexibility should further prevent excessive fluctuations and the loss of control over the inflation and foreign exchange expectations.

According to Pyshnyy, Ukraine continues foreign exchange liberalization efforts in compliance with the Strategy for Easing FX Restrictions, switching to a more flexible exchange rate.

“We are moving towards foreign exchange liberalization in line with the Strategy for Easing FX Restrictions, transitioning to a more flexible exchange rate, and returning to inflation targeting,” Pyshnyy noted.

Summarizing the results of negotiations with the IMF, Pyshnyy pointed out that the IMF mission had noted Ukraine’s high performance in implementing the EFF Arrangement.

“We have reached agreements on the parameters of policy and reforms, aimed at supporting macroeconomic stability amid the ongoing war for the next program period. The effective interaction of fiscal and monetary authorities remains important. Continued sound governance should maintain a proper basis for economic growth,” Pyshnyy emphasized.

He mentioned that, during talks with the IMF, significant attention was paid to the sources of financing Ukraine’s state budget in 2025 and ensuring timely and predictable assistance from international partners.

“The IMF emphasized that this applies to taxes (it is about the critical importance of systemic tax policy measures rather than emergency and situational decisions, which was the extraordinary taxation of banks’ profits), as well as the domestic debt market operations. The NBU, in particular, will actively contribute to maximizing the opportunities of the domestic government bond market,” Pyshnyy added.

Overall, according to the NBU Governor, the IMF experts confirmed the stability of the financial sector and significant progress in implementing reforms aimed at Ukraine’s accession to the EU.

“We are intensifying our efforts in this area. The banking system is gradually returning to compliance with the requirements that were in place prior to the full-scale invasion in order to become even more resilient,” Pyshnyy concluded.

A reminder that the IMF and Ukrainian authorities reached a staff-level agreement on the fifth review of the Extended Fund Facility (EFF) for Ukraine.

Photo: NBU