Ukraine’s Potential Transition to the Euro: Key Insights into Future Currency Strategies and Economic Impacts

The National Bank of Ukraine is currently intensifying its research into the possibility of transitioning the country’s external indicators and financial system to use the euro.
Due to the strengthening of trade and financial links with the European Union, the regulator is carefully examining potential changes in currency policy that could alter the traditional hryvnia exchange rate and sovereignty in currency management.
In an interview, First Deputy Governor Serhiy Nikolaychuk stated that although the dollar remains the primary currency for exchange rate determination, there is a growing possibility that Ukraine will shift towards the euro in the future.
He highlighted that, in the context of European integration, intensifying economic cooperation with the EU compels Ukraine to consider large-scale adoption of the euro in its international transactions.
Currently, most imports are paid in euros, and international aid increasingly arrives in this currency.
Nevertheless, the dollar still dominates the currency market, consistent with Ukraine’s historical pattern of strong dollar reliance.
However, considering emerging trends and upcoming changes in the structure of international reserves, experts suggest that the country may soon implement strategic steps to adjust its currency policy.
The National Bank has already begun publishing reserve data in euros and hryvnias, indicating a gradual shift in the currency composition.
According to Nikolaychuk, there is no concrete plan to switch the main currency in the immediate future, but the issue remains under active consideration.
He emphasized that the current policy keeps the dollar as the main exchange rate determinant, with future adjustments dependent on economic conditions.
This year, dollar depreciation has somewhat boosted Ukrainian exporters’ competitiveness, but significant impacts on trade balances from currency fluctuations are not expected.
Data shows that the proportion of dollar assets in reserves has decreased, while euro holdings have increased, confirming a trend towards greater euro utilization.
Although Ukraine’s international financing for 2025 remains stable, concerns linger regarding resources needed for the 2026-2027 budget deficits.
Nikolaychuk noted that only about a third of the over $65 billion needed for future financing has confirmed sources, underscoring the importance of developing new strategies for macroeconomic stability.