Ukraine’s central bank is exploring the idea of linking the national currency, the hryvnia, more closely to the euro instead of the US dollar, as the country moves closer to the European Union and global trade patterns continue to shift.
In comments to Reuters, Central Bank Governor Andriy Pyshnyi said the possible pivot reflects a combination of factors, including Ukraine’s bid for EU membership, Europe’s growing role in supporting Ukraine’s defence, increased volatility in global markets, and the potential fragmentation of world trade. “This work is complex and requires high-quality, versatile preparation,” Pyshnyi noted.
Since introducing the hryvnia in 1996, Ukraine has used the US dollar as its reference currency. Even after the Russian invasion in 2022, the central bank maintained a firm dollar peg before shifting to a managed exchange-rate system in October 2023, still using the dollar as a benchmark.
However, as the euro’s share in Ukraine’s foreign exchange market gradually rises, the central bank is reviewing whether it might be more beneficial to align with the euro. Neighbouring Moldova already made a similar move in January 2024.
The global dominance of the dollar is being questioned as trade tensions grow and US policies under former President Donald Trump have raised concerns. Trump’s previous suspension of military aid to Ukraine and the introduction of steep tariffs contributed to doubts over the dollar’s long-term role. Though the US remains a key partner—securing mineral deals and funding Ukraine’s reconstruction—the dollar has fallen over 9 per cent against major currencies since Trump returned to office.
Meanwhile, the EU has pledged long-term support for Ukraine’s defence and economic revival. Talks for EU accession are underway, and Kyiv could potentially join by 2030 if reform efforts continue. Pyshnyi believes a closer EU alignment could help lift growth to nearly 4 per cent in the next two years, though much depends on the war’s outcome.
Ukraine expects $55 billion in external financing this year, with reduced aid forecast for 2026 and 2027. Pyshnyi stressed that while a peaceful resolution would benefit the economy, those gains would take time to fully emerge.
