The National Bank of Ukraine has lowered the official exchange rate of the hryvnia against the euro to a new all-time record low of 52.2492 UAH for August 24. The central bank reduced the national currency value by 12 kopecks, marking the second consecutive day of historical record losses, according to information published on the NBU official website.
Ukraine will mark its Independence Day holiday on August 24 with the euro reaching its highest official valuation in the nation's history. The official rate for the US dollar also increased, though by a smaller margin of 4 kopecks, setting the rate at 44.6590 hryvnias.
Global euro strength and market indicators
According to market data from London Stock Exchange Group, known as LSEG, the euro is currently trading at a three-month high globally against the background of a general weakening of the US dollar. The euro exchange rate has gained support from survey results on business expectations in the eurozone, which point to relative economic resilience despite high energy costs.
A preliminary estimate for the eurozone composite Purchasing Managers Index, or PMI, stood at 52.1 points for August. That score surpassed the consensus forecast of 51.8 points gathered in a survey of financial analysts conducted by American newspaper The Wall Street Journal. The index tracks monthly private sector business trends, with readings above 50 denoting economic expansion.
High natural gas prices remain a problem, but because the eurozone economy now appears better able to withstand them, the euro and dollar currency pair can focus on the weak dollar story, according to Chris Turner, a market analyst at Dutch financial institution ING, as reported by The Wall Street Journal.
Hryvnia currency peg and naval blockade
The Ukrainian hryvnia is pegged to the US dollar rather than floating freely. Consequently, when the US dollar weakens internationally against the euro, the hryvnia depreciates against the European single currency alongside it.
The exchange rate of the euro to the hryvnia first crossed the 52 hryvnia landmark in June before easing by one hryvnia. Upward pressure on the rate resumed from the end of July, when Russia renewed its naval blockade of Ukrainian shipping ports.
National Bank role and holiday context
The National Bank of Ukraine operates as the supreme monetary authority of the state, responsible for setting official foreign exchange rates and maintaining domestic monetary stability. Independence Day on August 24 is Ukraine's principal national holiday, marking the anniversary of the 1991 parliamentary vote to leave the Soviet Union.
