In a response to economic pressures as a result of the Russian invasion, Ukraine’s central bank has devalued the country's currency, the Hryvnia, by 25% against the U.S Dollar. The move is an attempt to protect the Ukrainian economy and strengthen the country’s trade position.
"Such a measure will strengthen the competitiveness of Ukrainian producers" and "support the stability of the economy in wartime conditions," Ukraine’s central bank announced in a statement on 21 July.
Russia’s invasion has had a massive impact on the Ukrainian economy, as massive infrastructure damage, the loss of territory, complicated logistics, and difficult harvests have hit the nation’s finances significantly. Ukraine is receiving record amounts of financial support from international partners to help maintain the economy during the war.
Related News
- Russia wants more Ukrainian territory than just eastern Donbas region
- Ukraine criticises major European banks for keeping ties with Russia
In May, the Kyiv School of Economics estimated that the direct damage caused to Ukraine’s infrastructure during the course of the war was $94 billion. Ukraine’s economy is expected to shrink by as much as 45%, according to the World Bank. Drastic measures are needed to keep the country attractive for foreign trade.
The bank has now set the exchange rate as 36.57 hryvnias for one dollar, up from 29.25 before the announcement. This move, the bank says, will protect Ukraine from "speculative behaviour of market participants."
