The IMF is pressuring the National Bank of Ukraine to devalue the hryvnia.

The International Monetary Fund is pressuring Ukraine’s National Bank to conduct a controlled devaluation of the hryvnia, even as the country continues to suffer from war.

Bloomberg reports this, citing sources familiar with the progress of negotiations.

According to the agency, the IMF believes that a gradual depreciation of the hryvnia could help strengthen public finances by increasing budget revenues denominated in the national currency.

However, the NBU leadership opposes this move, citing inflation risks and negative public sentiment. Ukrainian officials note that the benefits of devaluation are limited, as the budget is heavily dependent on international aid, while a rising dollar could undermine price stability and destroy the country’s financial safety net.

“Devaluation could trigger inflationary pressure and cause public unrest, especially during wartime,” Bloomberg’s sources noted.

Beyond economic risks, there are also political ones. Authorities fear that the hryvnia’s decline could negatively impact public sentiment, given the population’s heightened sensitivity to price fluctuations following the financial crises of previous years.

According to the publication, disagreements between the IMF and the NBU could complicate negotiations on a new loan package, which could reach $8 billion. Ukraine has already received most of the $15.6 billion under the current IMF program, agreed upon in 2023.

Negotiations are ongoing during the IMF’s annual meeting in Washington, and technical negotiations on a new package are expected in November. IMF Managing Director Kristalina Georgieva plans to visit Kyiv to reaffirm support.

As a reminder, after the full-scale invasion began in February 2022, the NBU fixed the hryvnia’s exchange rate against the dollar to prevent a sharp decline. Subsequently, after the market stabilized, the regulator allowed limited exchange rate fluctuations, resulting in the hryvnia weakening by approximately 13% against the US dollar.

Let us recall that the IMF predicted the population of Ukraine in the event of an end to the war .

It was also previously reported that the International Monetary Fund believes that Ukraine will require $10–20 billion more funding by 2027 than the government anticipates .

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