On Wednesday, June 10, the National Bank of Ukraine set the official hryvnia-to-dollar exchange rate at 44.8437 hrn/$ — a new historical record low. This is not the first time the "bottom" has been reset in a row: the exchange rate has been steadily sliding down for several weeks.
Managed devaluation or uncontrolled decline?
The NBU officially maintains a managed exchange rate regime. This means that each such "record" value is not spontaneous but sanctioned by the regulator. The central bank balances between two pressures: preserving foreign currency reserves from rapid depletion and preventing a sharp jump in inflation, which hits hardest those who earn salaries in hryvnia.
The problem is that slow managed devaluation is also an inflationary factor — just stretched over time. Imported goods, fuel, medicines — all of this becomes more expensive in line with the exchange rate. According to State Statistics Service data, the share of imports in the consumer basket remains substantial even in wartime conditions.
Three pressure factors
Analysts identify several structural reasons for the hryvnia's weakness. First, negative trade balance: Ukraine imports significantly more than it exports, creating chronic demand for foreign currency. Second, budget deficit, which is partially financed through emission instruments. Third, psychological demand — the population and business traditionally buy dollars as protection against uncertainty, especially amid active hostilities.
External aid from the IMF, the United States, and the EU slows the decline but does not eliminate basic imbalances. Without tranches, the NBU's reserves would be depleted much faster.
What this means for ordinary people
For a Kyivian who earns 20,000 hryvnia per month, the rate of 44.84 means that their salary is equivalent to approximately $446 — whereas a year ago, at a rate of around 37 hrn/$, it was over $540. A difference of 94 dollars per month is not abstract statistics but a concrete loss of purchasing power.
For businesses working with imported raw materials or equipment, each new record is a recalculation of production costs and, ultimately, new prices on the shelves.
Where is the limit?
The NBU has not publicly announced target exchange rate levels. The regulator emphasizes flexibility as a tool for adapting the economy to shocks. Critics of this approach point out: flexibility without clear communication fuels devaluation expectations, which themselves become a driver of the decline.
If external tranches arrive on schedule and the front line does not trigger a new wave of internal displacement, the NBU could theoretically maintain the pace of devaluation in a controlled manner. But if one of these factors spirals out of control — will the regulator have enough reserves left to prevent a sudden, rather than gradual, depreciation?
