Ukraine’s central bank allowed limited fluctuations in its national currency, the hryvnia, from Tuesday for the first time since Russia’s invasion began in 2022 in a bid to bolster the country’s economy. Starting Tuesday, the National Bank “will introduce a system of controlled exchange rate flexibility” of the hryvnia in order to “strengthen the resilience of the Ukrainian economy,” the monetary institution said in a press release published on Monday evening.
This decision was taken due to the relative stabilization of the macroeconomic situation, the bank explained, pointing in particular to a significant decline in inflation (8.6% in August over a year compared to 26.6% for the whole of 2022) and the accumulation of foreign reserves reached a record $40.4 billion in August, and the stability of the banking system despite the war.
“International aid played a key role in this improvement observed over the last six months,” Olena Bilan, chief economist at Ukrainian investment company Dragon Capital, said on Facebook on Tuesday. She recalled that the country under Western control had received about $4 billion a month in international financial aid since the invasion began.