Ukraine’s economy has collapsed since the start of the war and could see its GDP plunge by 45% this year.
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The central bank of Ukraine announced Thursday, July 21 the devaluation of 25% of the national currency, the hryvnia, against the dollar, due to the impact of the Russian invasion on the national economy. “Such a measure will strengthen the competitiveness of Ukrainian producers” and “will support the stability of the economy in wartime conditions”she said in a statement.
This established the exchange rate on Thursday at 36.57 hryvnias for one dollar against 29.25 hryvnias for one dollar previously, a rate which was in effect from the start of the Russian invasion at the end of February. This rate will remain fixed until the new decision of the central bank which preserved most of the restrictions on the foreign exchange market introduced since the beginning of the Russian invasion to prevent a collapse of the national currency.
Ukraine’s economy has collapsed since the start of the war and could see its GDP plunge by 45% this year, according to the latest World Bank estimates. In this context of exceptional crisis, kyiv on Wednesday asked its creditors to agree to agreements allowing the postponement of the payment of interest on its debt. A group of Western creditors (including France, the United States, Germany, Japan and the United Kingdom) agreed to such a postponement, urging other holders of Ukrainian bonds to do the same.