Why is the dollar rising in Ukraine? Here’s the response from the National Bank of Ukraine.

In December 2024, the net demand for cash foreign currency in Ukraine saw a significant increase. The main factors contributing to this were the rise in budget expenditures and the activation of business operations at the year's end. This is reflected in the January Macroeconomic and Monetary Review by the NBU.

To stabilize the currency market and offset the increased private sector deficit, the National Bank of Ukraine raised the volume of net foreign currency sales to $5.3 billion.

The average monthly exchange rate of the hryvnia depreciated by 1% in December due to heightened currency demand. Simultaneously, the difference between the cash and official exchange rates was approximately 1%, while the demand for cash currency remained at the level of the previous month.

As part of measures to maintain the stability of the currency market and gradually reduce inflation to 5%, the NBU increased the discount rate to 13.5% in December.