Ukraine's hryvnia survives war-driven collapse with bold central bank moves
Ukraine's currency, the hryvnia, faced severe pressure after Russia's invasion in early 2022. The exchange rate plummeted from around 29 to the dollar to nearly 42 by mid-year. Authorities took urgent steps to stabilise the situation and prevent further economic turmoil.
Before the war, the hryvnia traded at roughly 7 to the dollar. By February 2022, it had weakened to about 29 per dollar. The Russian invasion triggered a sharp decline, pushing the rate to 41.5 by July.
The National Bank of Ukraine responded by printing hundreds of billions of hryvnia to maintain liquidity. It also imposed a fixed exchange rate until June 2022, then switched to a managed float system. Regular currency auctions and foreign reserves helped steady the rate between 36 and 37 hryvnia per dollar through 2025.
Russian banks were accused of deliberately weakening the hryvnia during the crisis. Price controls were introduced to curb inflation linked to the currency's fall. Analysts even used the Big Mac Index to compare the hryvnia's purchasing power against the dollar, highlighting its steep decline.
The hryvnia's value eventually stabilised after emergency measures by Ukraine's central bank. The managed float system and foreign reserves played a key role in preventing further collapse. By 2025, the exchange rate remained within a narrower range, easing some economic strain.
