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Why the hryvnia remains stable: three key factors

For the second year in a row, the hryvnia is kept within the exchange rate corridor established by the NBU. We analyze the factors behind this stability and how sustainable it is.

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Why the hryvnia remains stable: three key factors

The stability of the hryvnia against the background of protracted hostilities is justifiably surprising to most foreign analysts. Let's consider three key factors that explain this phenomenon.

The first is large-scale international financial support. Monthly revenues from international partners (EU, IMF, USA, Great Britain) in the amount of $2-3 billion actually cover the current account deficit and finance a significant part of the budget deficit.

The second is strict exchange control. The NBU introduced a number of restrictions on movement capital, which limits the possibilities for speculative attacks on the hryvnia.

The third is the growth of foreign exchange earnings from exports. Despite logistical limitations, the agricultural and IT sectors generate a significant flow of foreign exchange earnings.