Dragon Capital expects that the National Bank of Ukraine will return to a controlled and gradual weakening of the hryvnia in the second half of the year.
This is stated in the company's message, the Ukrainian News agency reports.
In the 1st quarter of 2025, the NBU allowed the hryvnia to strengthen against the US dollar by 1.4% - to 41.5 UAH/USD after a long period of controlled devaluation.
The strengthening of the hryvnia was the NBU's reaction to high inflation, significant external financing, global weakening of the dollar and seasonal decline in demand for foreign currency.
"We expect the NBU to return to a controlled and gradual depreciation of the hryvnia in the second half of the year, when inflation rates begin to decline. However, given the significant volumes of financial assistance, we have increased the forecast of the NBU reserves to USD 59 billion (from USD 41 billion) and reduced the forecast of the exchange rate at the end of the year to 44 UAH/USD (-4.4% y/y; previous forecast — 45 UAH/USD)," the company noted.
Achieving a sustainable ceasefire will contribute to a slower devaluation of the hryvnia in the second half of the year, as fundamental pressure on prices will be higher, and the balance of payments situation will improve due to a slowdown in the outflow of private capital and the preservation of the volumes of external financial assistance.
In the future, the dynamics of the exchange rate will depend on the volumes of external financing and private capital flows, while the foreign trade deficit will remain significant due to structural changes in the economy.
As the Ukrainian News agency earlier reported, the ICU group predicts a hryvnia exchange rate of 43.5 UAH/USD with inflation of about 8% by the end of 2025.
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