5 Hryven – Ukraine

In 2010, Ukraine's currency, the hryvnia (UAH), was in a period of relative but fragile stability following the severe shocks of the Global Financial Crisis. The crisis had forced the National Bank of Ukraine (NBU) to enact a drastic devaluation in late 2008, abandoning its peg to the US dollar after spending nearly a third of its reserves in a failed defense. By 2010, the hryvnia had settled at a new, weaker exchange rate of approximately 8 UAH/USD, a level maintained through heavy administrative interventions and restrictions by the NBU. This stability was largely artificial, propped up by a $15.4 billion Stand-By Arrangement with the International Monetary Fund (IMF), which provided crucial foreign exchange reserves but came with strict conditions for economic reform.

The underlying economic fundamentals, however, remained weak and posed significant threats to the currency's long-term health. President Viktor Yanukovych, who took office in February 2010, pursued policies that increased fiscal pressure, including raising social spending and reinstating energy subsidies that inflated the budget deficit. Furthermore, the country ran a persistent and large current account deficit, meaning it was importing far more than it exported, creating constant downward pressure on the hryvnia. Corruption, a lack of structural reforms, and an over-reliance on steel and chemical exports left the economy vulnerable to external commodity price swings.

Consequently, the stability of 2010 was seen by most economists as a temporary calm. The IMF program was suspended in early 2011 due to the government's failure to meet conditions on gas tariff hikes, cutting off a key source of support. This set the stage for the gradual depletion of reserves and mounting pressures that would eventually lead to a new currency crisis in 2014, following the political upheaval of the Euromaidan Revolution and the outbreak of conflict in the Donbas region. Thus, the currency situation in 2010 was one of managed stability masking deep-seated vulnerabilities.