The idea of replacing the U.S. dollar with the euro as the main currency against which the hryvnia exchange rate is formed has been discussed in Ukraine since 2024. Despite the periodic appearance of this topic in the banking environment, experts agree that even if such a decision is taken, its realization will require considerable time.
About it writes "BusinessCensor", analyzing what such a change of exchange rate peg will mean for Ukrainians.
The publication tells about the nuances and prospects of exchange rate policy in Ukraine, namely:
What does the change of the exchange rate peg mean?
It is noted that we are not talking about the change of the national currency - the hryvnia remains in circulation. Changes may affect only the currency against which its exchange rate will be set. Today, this role is played by the U.S. dollar, that is, the value of other currencies in the hryvnia is calculated through the dollar. In case of changes, this key currency may become the euro.
When the transition to the euro is possible
According to the newspaper, Sergiy Mamedov, who heads the board of Globus Bank and serves as vice-president of the Association of Ukrainian Banks, believes that the possible pegging of the hryvnia to the euro may take place not earlier than 2028. He emphasizes five obligatory conditions for such a step: significant growth of the euro share in trade, full inclusion of Ukraine in the EU economic space, establishment of sustainable peace with security guarantees, active participation of European investments in the reconstruction of the country, as well as compliance with the EU democracy standards.
In addition, an additional obstacle is Ukraine's current three-year budget planning, which is currently dollar-oriented. This makes an immediate change of reference point impossible, even if a political decision is made.
"Re-pegging the currency is a very long-term process. It won't happen tomorrow or the day after tomorrow. It will definitely not happen until the end of the active phase of hostilities. And nothing will change for ordinary citizens. If there will be a re-binding, it will be as comfortable as possible, people will feel practically nothing. The dollar will remain the main currency of international settlements," says Oleg Pendzin, a member of the Economic Discussion Club.
Will Ukraine switch to the euro after joining the EU?
It is expected that Ukraine will become a member of the European Union by 2030 - such a goal was outlined by the President of the European Council Charles Michel in 2023. However, with that comes the question: will Ukraine replace its currency with the euro?
It is reported that, according to the deputy head of the National Bank Serhiy Mykolaichuk, even after joining the EU, Ukraine will keep the hryvnia for a long time. He considers the presence of its own currency and independent monetary policy an advantage rather than a weakness.
The publication emphasizes that even within the EU, the use of the euro is not mandatory. Such countries as Denmark, Sweden, Bulgaria, Poland, Czech Republic, Romania and Hungary have kept their currencies. In Denmark and Sweden, a majority of citizens opposed the euro in referendums. In Bulgaria, about 75% of the population supported keeping the lev, even though it is already pegged to the euro. Polish authorities also see no political or economic need to abandon the zloty, pointing out that such a move could weaken the country.
