Hryvnia Devaluation in Ukraine as a Channel of “Imported” Inflation to Moldova

Since the beginning of 2026, Ukraine’s foreign exchange market has shown a persistent depreciation of the national currency. On 13 January, the official exchange rate reached a historical high of UAH 43.25 per US dollar, crossing an important psychological threshold. This development contrasts with the relative exchange rate stability observed throughout 2025, when the hryvnia fluctuated mainly within the range of UAH 41.5–42 per dollar and ended the year at nearly the same level at which it began.

At the same time, the euro appreciated significantly over the course of 2025, rising from UAH 43.68 to UAH 49.55 (+13.4%), reflecting broader global currency shifts, particularly the weakening of the US dollar. In early 2026, these structural trends translated into a rapid acceleration of hryvnia depreciation: within less than two weeks, the exchange rate increased by more than one hryvnia, while the euro exceeded UAH 50 for the first time.

Analytical assessments indicate that the current depreciation pressure is driven by a combination of factors, including seasonal fluctuations, a sharp increase in year-end budget expenditures, and changes in monetary and exchange rate policy. A key element is the transition toward a more flexible, “managed” depreciation strategy, aimed at supporting fiscal revenues under conditions shaped by external financial commitments.

For Moldova, these developments have clear macroeconomic implications. Ukraine is among Moldova’s major trading partners, particularly in terms of imports of food products, industrial goods, and certain categories of raw materials. While a weaker hryvnia may temporarily reduce the foreign-currency price of Ukrainian exports, it also fuels inflationary pressures within Ukraine itself. As a result, Moldova faces a tangible risk of “imported inflation,” whereby rising production and price levels in Ukraine are transmitted to the Moldovan market through trade channels.

Comment by the Institute of Danube Research

From the perspective of the Institute of Danube Research, this situation underscores the need for enhanced monitoring of exchange rate and price dynamics in neighboring economies, especially Ukraine. Particular attention should be paid to import-dependent sectors, where currency volatility can be rapidly translated into consumer price growth. Under conditions of strong regional economic interdependence, exchange rate instability in a partner country increasingly becomes not an external shock, but a direct domestic macroeconomic risk for Moldova.