Ukrainian Currency Devalued by 25%... "Seen as a Measure to Protect Foreign Exchange Reserves"

Photo by Yonhap News

[Asia Economy Reporter Hwang Seoyul] The Central Bank of Ukraine has decided to devalue its national currency, the hryvnia, by 25% against the US dollar.

According to major foreign media on the 21st (local time), this measure adjusted the exchange rate to 36.5686 hryvnia per dollar. For the past five months, the exchange rate had been 29.25 hryvnia per dollar.

The central bank explained, "We considered the structural changes in Ukraine's economy due to the war and the strength of the US dollar against other currencies," adding, "This measure will support the stability of the wartime economy and help the competitiveness of Ukrainian manufacturing."

Foreign media analyzed that this is a measure to protect foreign exchange reserves amid economic damage caused by the war. Since the Russian invasion began, the central bank had suspended hryvnia transactions and strengthened capital controls to prevent inflation and secure essential goods, but as overseas imports sharply declined during wartime, foreign exchange reserves decreased as a side effect.

Additionally, exporters have been reluctant to exchange hard currency (currencies usable in international settlements) based on the official exchange rate, which did not reflect the economic deterioration that lasted for about half a year.

This content was produced with the assistance of AI translation services.