Demand for currency has decreased, causing the dollar's exchange rate to drop to its lowest point since late December.

The demand for currency decreased in the second half of January 2025. The National Bank reduced sales from reserves to cover the structural currency deficit and lowered the dollar exchange rate.

This is reported by RBK-Ukraine citing data from the NBU.

During the week of January 20-24, 2025, the NBU sold $756.25 million in the interbank currency market.

This is 25.5% less than the previous week, January 13-17, when sales amounted to $1.015 billion.

Since the beginning of the year, the NBU has sold a total of $3.173 billion in the interbank market.

Dollar Exchange Rate

The non-cash market is balanced by the currency sales from the National Bank. The NBU responds to market conditions by raising or lowering the intervention rate. Following trading, the central bank establishes the official exchange rate.

Last week, the dollar exchange rate fell to levels seen at the end of December. Over the week, the dollar depreciated by 20 kopecks to 41.92 hryvnias.

The situation in the cash market is almost entirely dependent on the interbank market. Over the week, the dollar exchange rate in the cash market dropped by 30 kopecks to 42.25 UAH/USD.

NBU Commentary

According to the Deputy Head of the NBU, Yuriy Geletiy, the demand for currency was high at the end of last year due to significant volumes of international aid to Ukraine. A portion of these funds was spent on imports, which led the NBU to increase its sales volume in the interbank market to a record $5.3 billion.

The demand for currency remained substantial at the beginning of 2025 due to seasonal factors. However, in recent days, the situation has changed, and the dollar began to depreciate.

Currency Interventions

The demand for currency surged in December, and the NBU sold $5.284 billion in the interbank currency market. This is the highest monthly volume in history.

In total, for 2024, the NBU sold $34.822 billion in the interbank market. However, the volume of international aid to Ukraine in 2024 amounted to $41.7 billion, which exceeded the interventions in the interbank market.

Additionally, at the beginning of the year, Ukraine already received 3 billion euros from the EU from frozen Russian assets.