20 Hryven – Ukraine

In 2018, Ukraine's currency, the hryvnia (UAH), demonstrated remarkable stability, a significant achievement following the severe economic and currency crisis of 2014-2015. During that earlier period, the hryvnia had lost nearly 70% of its value against the US dollar due to the combined shocks of the Russian annexation of Crimea, war in the Donbas region, collapsing exports, and a loss of foreign reserves. By 2018, however, the National Bank of Ukraine (NBU) had successfully implemented a managed floating exchange rate regime, supported by a crucial $17.5 billion International Monetary Fund (IMF) program. This stability was underpinned by consistent foreign currency inflows from robust agricultural exports, steady remittances from workers abroad, and improved investor confidence due to ongoing, though often slow, reform efforts.

The central bank's primary focus in 2018 was on building foreign exchange reserves and maintaining tight monetary policy to control inflation. After dipping below $5 billion in early 2015, Ukraine's international reserves were steadily rebuilt, reaching a five-year high of over $20 billion by the end of 2018. This buffer provided crucial protection against external shocks. Furthermore, the NBU maintained a high discount rate (18% for most of the year) to curb inflationary pressures, which had spiked to over 60% in 2015 but were brought down to a single-digit annual rate by late 2018. This combination of factors allowed the hryvnia to trade within a relatively narrow corridor of around UAH 27-28 per US dollar throughout the year.

Despite this surface stability, underlying vulnerabilities persisted. The economy remained heavily dependent on volatile commodity exports, particularly steel and grain. Structural reforms in areas like the judiciary and state-owned enterprises, which were key to unlocking further IMF tranches and sustaining long-term confidence, faced significant political resistance and delays. Consequently, while 2018 represented a year of hard-won monetary stabilization and a pause from crisis, it was a stability that remained fragile and contingent on continued external financial support and the politically difficult implementation of deeper economic reforms.