The reasons for the devaluation of the hryvnia in 2020

For almost a year, the hryvnia exchange rate against the euro has risen from UAH 26-27 in February to UAH 33 now, ie the hryvnia has depreciated by 20%.
This indicator primarily affects imports in Ukraine, primarily for products that are in the consumer basket and fuels and lubricants. Therefore, if the government continues to cover the emission budget deficit, the hryvnia exchange rate will be the first to respond.

But this does not mean that the government is not able to patch “holes” in the budget, such as issuing salaries to state employees or covering the deficit of pension benefits. In this case, the hryvnia will hardly fluctuate.

If the government implements large-scale programs, such as large investments in construction not provided for in the budget or other, then the exchange rate in winter will reach a maximum.
However, in the winter we can see the appreciation of the hryvnia exchange rate – these are seasonal fluctuations and in the spring if there are no shocks, the exchange rate will start to change.
The IMF tranche is also expected to be received at the end of the year, which will significantly improve the economic situation.