Ukrainian govt increases its projections of euro exchange rate by end of 2026

MOSCOW. May 12 (Interfax) - The U.S. dollar-to-euro exchange rate in Ukraine is projected to be $1.16/1 euro by the end of 2026, Ukrainian media reported citing an updated estimate the government included in its draft amendments to the state budget.

The government previously projected the dollar-euro exchange rate at $1.08/1 euro.

These changes have impacted the estimate of Ukraine's maximum state debt: it will be reduced by only UAH 332.2 billion, although state budget financing through debt transactions should be reduced by UAH 651.5 billion owing to 13.2 billion euros the European Union is to provide as part of its new budget support under the Ukraine Support Loan.

The draft proposes setting the maximum state debt by the end of 2026 at UAH 10.145 trillion and the maximum state-guaranteed debt at UAH 464.6 billion, with budget revenues of UAH 5.196 trillion and expenditures of UAH 6.407 trillion.

As reported, the government for the first time specifically included a UAH 49.4/1 euro forecast for an average annual euro-hryvnia exchange rate in its 2026 state budget calculations, in addition to its routine forecast for an average annual dollar exchange rate, which it expects to be around UAH 45.7/$1 this year.

The share of euro-denominated liabilities in Ukraine's state debt has increased significantly in recent years, as the EU has become Ukraine's main donor, while financial support from the U.S. has declined.

Ukraine's state and state-guaranteed debt in Q1 2026 increased in hryvnia terms by UAH 190.4 billion, or 2.1%, to UAH 9.233 trillion, while decreasing in dollar terms by $2.5 billion, or 1.2%, to $210.8 billion.

The share of euros in Ukraine's debt as of the end of March 2026 was 44.08%, that of dollars 22.74%, hryvnias 20.94%, and IMF special drawing rights (SDR) 9.12%.

In its Inflation Report updated in April, the National Bank of Ukraine (NBU) projected an average annual dollar-to-euro exchange rate to be $1.18/1 euro, which is in line with the actual current rate, compared to $1.13/1 euro in 2025.

The official hryvnia-dollar exchange rate is currently UAH 43.8033/$1, and the hryvnia-euro rate UAH 51.5433/1 euro.