Май 8, 2025 15:25 73
Ukraine is starting to consider abandoning the US dollar, possibly tying its currency more closely to the euro, amid a fracturing of global trade and growing ties with Europe, Central Bank Governor Andriy Pyshny told “Reuters”.
Potential accession to the European Union, “the EU’s strengthening role in ensuring our defense capabilities, growing instability in global markets and the likelihood of fragmentation of world trade” are forcing the Central Bank to reconsider whether the euro should become the reference currency for the Ukrainian hryvnia instead of the dollar, Pyshny said in an emailed comment.
“This work is complex and requires high-quality, multi-faceted preparation,” Pyshny added in the most direct comment yet by a Ukrainian official about a possible change.
The dollar dominates international trade and accounts for the bulk of the world’s foreign exchange reserves. Major economies including Saudi Arabia and Hong Kong have pegged their currencies to the dollar.
Under President Donald Trump, however, the United States has started a trade war, imposing tariffs that could be the highest in a century — a move that has led some observers to question the dollar’s future role as a global reserve currency.
Now in its fourth year of fighting a Russian invasion, Ukraine has also seen Trump temporarily suspend some military aid to the country.
European leaders, including EU officials, have pledged to bolster Kiev’s military to ensure it can be a cornerstone of Ukraine’s future security, but progress has been slow.
Phoenix Cullen, global head of emerging markets research at Societe Generale, said the discussions in Ukraine fit into a broader trend of countries trying to rethink how to align their geopolitical, security and trade ties with a changing world order.
“Of course, in the case of Ukraine, its fate is tied to Europe and European defense,” he said. Kalen. “From that perspective, all economic and political aspirations will continue to be heavily tied to the euro, so I think it makes sense for many reasons that they would consider this change.”
Meanwhile, Ukraine has reached an agreement that gives the United States preferential access to new Ukrainian mineral deals and that funds investment in the country’s reconstruction.
Since Trump returned to the White House, the U.S. dollar has fallen more than 9% against a basket of major currencies as investors have pulled back from holding U.S. assets.
Some experts caution against directly linking the dollar’s strength to its reserve currency status. Yet, historically, dollar assets have been closely linked to security alliances and military ties with the United States.
U.S. dollar transactions continue to dominate all segments of the foreign exchange market, Pishny said, but the share of euro-denominated transactions is increasing in most segments, albeit “moderately so far.” He did not provide details.
The U.S. Treasury Department did not respond to a request for comment.
Ukraine introduced the hryvnia in 1996 and has used the dollar as its reference currency for decades.
Immediately after the Russian invasion in February 2022, the central bank imposed capital controls and pegged the hryvnia at an official rate of around 29 to the U.S. dollar. Ukraine was later forced to devalue due to mounting fiscal imbalances.
In October 2023, The central bank has moved from a hard peg to a managed floating exchange rate regime that uses the US dollar as a reference point — a tool for measuring foreign exchange interventions and smoothing out exchange rate fluctuations.
The EU began membership negotiations with Ukraine and Moldova nearly a year ago, although they face a long and difficult road ahead before they can join the bloc.
In February, European Commission President Ursula von der Leyen said that Ukraine could join by 2030 as long as it continues to implement reforms to its political and judicial systems at the current pace.
In preparation for this, Moldova changed its reference currency for the Moldovan leu from the dollar to the euro on January 2.
A revival of investment and consumer activity thanks to closer ties with Europe and economic normalization would help Ukraine’s economic growth accelerate slightly over the next two years to 3.7-3.9 percent, Pyshny said, although much of the economic trajectory depends on how the conflict develops.
“A quick end to the war would clearly be a positive scenario with good economic outcomes if it included security guarantees for Ukraine,” he said.
“However, it is extremely important to recognize that the economic benefits of ending the war are likely to take time to fully materialize.”
Ukraine relies on external financing to support its military efforts.
Pyshny said he expects $55 billion this year, which would not only cover the budget deficit but also be used to set aside a reserve for public finances for the coming years, when the volume of aid will likely begin to decline.
“We forecast that Ukraine will receive about $17 billion in 2026 and $15 billion in 2027,” Pishny said.
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