Latest news with #Pyshnyi
Business Recorder
20-05-2025
- Business
- Business Recorder
IMF begins new review of war-torn Ukraine's $15.5 billion loan
KYIV: An International Monetary Fund monitoring mission started a new review of its $15.5 billion program to Ukraine on Tuesday, with discussions expected to focus on the war-torn economy and budget needs, the lender and Ukrainian officials said. IMF said in a statement that the policy discussions would be part of its eighth review of its four-year Extended Fund Facility program. 'We look forward to constructive and substantive discussions. We are starting from good positions,' said Central Bank Governor Andriy Pyshnyi. 'The programme remains a particular factor of resilience for us, especially during this time.' More than three years of the war against Russia have devastated the Ukrainian economy. Millions of people fled the fighting, cities and infrastructure were bombed, and exports and supply chains were disrupted. In the first year of the war, Ukraine's gross domestic product fell by nearly 30%. It is still lower than its pre-war levels, but delivered modest growth in 2023 and 2024. Pyshnyi said the talks were expected to touch on how to finance Ukraine's budget needs and ensure debt sustainability, both via attracting financing from partners and mobilising domestic revenues. Government officials said Ukraine's budget needs had been secured for 2025 thanks to financial aid from partners but uncertainty is growing over international economic support for the next year. Trump tariffs to 'weigh on' Pakistan's economy, says IMF Ukraine spends the bulk of its domestic revenues to finance its defence efforts and relies on financial support from Western allies to finance humanitarian and social spending. Ukraine's budget deficit is planned at about $38 billion this year. Officials would also discuss the financial sector and further reforms needed to strengthen its stability, including state regulations of credit bureaus and developing financial market infrastructure, Pyshnyi said.
Straits Times
07-05-2025
- Business
- Straits Times
Exclusive: Ukraine considers shift from dollar to euro amid geopolitical realignments
FILE PHOTO: U.S. dollar, euro and Ukrainian hryvnia banknotes are seen in this picture illustration created in Kyiv, Ukraine, October 31, 2016. REUTERS/Valentyn Ogirenko/Illustration/File Photo LONDON - Ukraine is starting to consider a shift away from the U.S. dollar, possibly linking its currency more closely to the euro amid the splintering of global trade and its growing ties to Europe, Central Bank Governor Andriy Pyshnyi told Reuters. Potential accession to the European Union, a "strengthening of the EU's role in ensuring our defense capabilities, greater volatility in global markets, and the probability of global-trade fragmentation," are forcing the central bank to review whether the euro should be the reference currency for Ukraine's hryvnia instead of the dollar, Pyshnyi said in emailed remarks. "This work is complex and requires high-quality, versatile preparation," Pyshnyi added, in the most direct comments by a Ukrainian official on a possible shift. The dollar dominates international trade and accounts for the majority of global reserves. Major economies including Saudi Arabia and Hong Kong peg their currencies to the dollar. But under President Donald Trump, the U.S. has unleashed a trade war by introducing what could be the highest tariffs in a century, a move that has prompted some observers to question the future role of the dollar as global reserve currency. Now in the fourth year of fighting an invasion by Russia, Ukraine has also seen Trump temporarily cut off some military assistance to the country. European leaders, including from the EU, have vowed to strengthen Kyiv's army to ensure it can be the cornerstone of future security in Ukraine but progress has been difficult. Meanwhile, Ukraine struck an agreement that gives the United States preferential access to new Ukrainian mineral deals and which funds investment in the nation's reconstruction. Since Trump's return to the White House, the greenback is down more than 9% against a basket of major currencies as investors pull back from owning U.S. assets. Some experts warn against associating the strength of the dollar to its reserve-currency status. Yet historically, dollar holdings have been linked to security alliances and military ties to Washington. Transactions with the U.S. dollar continue to dominate all segments of the FX market, said Pyshnyi, but the share of euro-denominated transactions has been rising in most segments though "so far moderately." He did not elaborate. Ukraine launched the hryvnia in 1996, and over the decades it has used the dollar as the reference currency. Immediately after Russia's invasion in February 2022, the central bank imposed capital controls and pegged the hryvnia at an official rate of about 29 to the U.S. dollar. Ukraine was forced to devalue later due to a buildup of fiscal imbalances. In October 2023, the central bank moved from a firm peg to a managed exchange-rate regime that uses the U.S. dollar as the reference - the gauge to measure FX interventions and for smoothing fluctuations in the exchange rate. The EU opened membership talks with Ukraine and Moldova nearly a year ago, although a long and tough road lies ahead before it could join the bloc. EU President Ursula von der Leyen said in February that Ukraine could be in by 2030 provided it continued to enact reforms to its political and judicial system at the current pace. In preparation, Moldova switched its reference currency for the Moldovan lei to the euro from the dollar on Jan. 2. A revival of investment and consumer activity thanks to closer links with Europe and economic normalisation would help economic growth pick up slightly over the next two years to 3.7-3.9%, Pyshnyi said, though much of the economic trajectory depends on how the conflict develops. "A quick end to the war would clearly be a positive scenario with good economic outcomes if it were to incorporate security guarantees for Ukraine," Pyshnyi said. "Nevertheless, it's crucial to acknowledge that the economic benefits of ending the war would likely take time to fully materialize." Ukraine is relying on external financing to help fund the war effort. Pyshnyi said he expected $55 billion this year which would not only cover the budget deficit but also be used to set aside a public-finance reserve for the coming years, when aid volumes were likely to start declining. "We project Ukraine will receive about $17 billion in 2026 and $15 billion in 2027," said Pyshnyi. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
Yahoo
07-05-2025
- Business
- Yahoo
Ukraine considers shift from dollar to euro amid geopolitical realignments
By Karin Strohecker and Olena Harmash LONDON (Reuters) -Ukraine is starting to consider a shift away from the U.S. dollar, possibly linking its currency more closely to the euro amid the splintering of global trade and its growing ties to Europe, Central Bank Governor Andriy Pyshnyi told Reuters. Potential accession to the European Union, a "strengthening of the EU's role in ensuring our defense capabilities, greater volatility in global markets, and the probability of global-trade fragmentation," are forcing the central bank to review whether the euro should be the reference currency for Ukraine's hryvnia instead of the dollar, Pyshnyi said in emailed remarks. "This work is complex and requires high-quality, versatile preparation," Pyshnyi added, in the most direct comments by a Ukrainian official on a possible shift. The dollar dominates international trade and accounts for the majority of global reserves. Major economies including Saudi Arabia and Hong Kong peg their currencies to the dollar. But under President Donald Trump, the U.S. has unleashed a trade war by introducing what could be the highest tariffs in a century, a move that has prompted some observers to question the future role of the dollar as global reserve currency. Now in the fourth year of fighting an invasion by Russia, Ukraine has also seen Trump temporarily cut off some military assistance to the country. European leaders, including from the EU, have vowed to strengthen Kyiv's army to ensure it can be the cornerstone of future security in Ukraine but progress has been difficult. Meanwhile, Ukraine struck an agreement that gives the United States preferential access to new Ukrainian mineral deals and which funds investment in the nation's reconstruction. Since Trump's return to the White House, the greenback is down more than 9% against a basket of major currencies as investors pull back from owning U.S. assets. Some experts warn against associating the strength of the dollar to its reserve-currency status. Yet historically, dollar holdings have been linked to security alliances and military ties to Washington. Transactions with the U.S. dollar continue to dominate all segments of the FX market, said Pyshnyi, but the share of euro-denominated transactions has been rising in most segments though "so far moderately." He did not elaborate. Ukraine launched the hryvnia in 1996, and over the decades it has used the dollar as the reference currency. Immediately after Russia's invasion in February 2022, the central bank imposed capital controls and pegged the hryvnia at an official rate of about 29 to the U.S. dollar. Ukraine was forced to devalue later due to a buildup of fiscal imbalances. In October 2023, the central bank moved from a firm peg to a managed exchange-rate regime that uses the U.S. dollar as the reference - the gauge to measure FX interventions and for smoothing fluctuations in the exchange rate. The EU opened membership talks with Ukraine and Moldova nearly a year ago, although a long and tough road lies ahead before it could join the bloc. EU President Ursula von der Leyen said in February that Ukraine could be in by 2030 provided it continued to enact reforms to its political and judicial system at the current pace. In preparation, Moldova switched its reference currency for the Moldovan lei to the euro from the dollar on Jan. 2. A revival of investment and consumer activity thanks to closer links with Europe and economic normalisation would help economic growth pick up slightly over the next two years to 3.7-3.9%, Pyshnyi said, though much of the economic trajectory depends on how the conflict develops. "A quick end to the war would clearly be a positive scenario with good economic outcomes if it were to incorporate security guarantees for Ukraine," Pyshnyi said. "Nevertheless, it's crucial to acknowledge that the economic benefits of ending the war would likely take time to fully materialize." Ukraine is relying on external financing to help fund the war effort. Pyshnyi said he expected $55 billion this year which would not only cover the budget deficit but also be used to set aside a public-finance reserve for the coming years, when aid volumes were likely to start declining. "We project Ukraine will receive about $17 billion in 2026 and $15 billion in 2027," said Pyshnyi. (Reporting by Karin Strohecker in London and Olena Harmash in Kyiv. Editing by Elisa Martinuzzi and Matthew Lewis)
Straits Times
07-05-2025
- Business
- Straits Times
Ukraine considers shift from dollar to euro amid geopolitical realignments
FILE PHOTO: U.S. dollar, euro and Ukrainian hryvnia banknotes are seen in this picture illustration created in Kyiv, Ukraine, October 31, 2016. REUTERS/Valentyn Ogirenko/Illustration/File Photo LONDON - Ukraine is starting to consider a shift away from the U.S. dollar, possibly linking its currency more closely to the euro amid the splintering of global trade and its growing ties to Europe, Central Bank Governor Andriy Pyshnyi told Reuters. Potential accession to the European Union, a "strengthening of the EU's role in ensuring our defense capabilities, greater volatility in global markets, and the probability of global-trade fragmentation," are forcing the central bank to review whether the euro should be the reference currency for Ukraine's hryvnia instead of the dollar, Pyshnyi said in emailed remarks. "This work is complex and requires high-quality, versatile preparation," Pyshnyi added, in the most direct comments by a Ukrainian official on a possible shift. The dollar dominates international trade and accounts for the majority of global reserves. Major economies including Saudi Arabia and Hong Kong peg their currencies to the dollar. But under President Donald Trump, the U.S. has unleashed a trade war by introducing what could be the highest tariffs in a century, a move that has prompted some observers to question the future role of the dollar as global reserve currency. Now in the fourth year of fighting an invasion by Russia, Ukraine has also seen Trump temporarily cut off some military assistance to the country. European leaders, including from the EU, have vowed to strengthen Kyiv's army to ensure it can be the cornerstone of future security in Ukraine but progress has been difficult. Meanwhile, Ukraine struck an agreement that gives the United States preferential access to new Ukrainian mineral deals and which funds investment in the nation's reconstruction. Since Trump's return to the White House, the greenback is down more than 9% against a basket of major currencies as investors pull back from owning U.S. assets. Some experts warn against associating the strength of the dollar to its reserve-currency status. Yet historically, dollar holdings have been linked to security alliances and military ties to Washington. Transactions with the U.S. dollar continue to dominate all segments of the FX market, said Pyshnyi, but the share of euro-denominated transactions has been rising in most segments though "so far moderately." He did not elaborate. Ukraine launched the hryvnia in 1996, and over the decades it has used the dollar as the reference currency. Immediately after Russia's invasion in February 2022, the central bank imposed capital controls and pegged the hryvnia at an official rate of about 29 to the U.S. dollar. Ukraine was forced to devalue later due to a buildup of fiscal imbalances. In October 2023, the central bank moved from a firm peg to a managed exchange-rate regime that uses the U.S. dollar as the reference - the gauge to measure FX interventions and for smoothing fluctuations in the exchange rate. The EU opened membership talks with Ukraine and Moldova nearly a year ago, although a long and tough road lies ahead before it could join the bloc. EU President Ursula von der Leyen said in February that Ukraine could be in by 2030 provided it continued to enact reforms to its political and judicial system at the current pace. In preparation, Moldova switched its reference currency for the Moldovan lei to the euro from the dollar on Jan. 2. A revival of investment and consumer activity thanks to closer links with Europe and economic normalisation would help economic growth pick up slightly over the next two years to 3.7-3.9%, Pyshnyi said, though much of the economic trajectory depends on how the conflict develops. "A quick end to the war would clearly be a positive scenario with good economic outcomes if it were to incorporate security guarantees for Ukraine," Pyshnyi said. "Nevertheless, it's crucial to acknowledge that the economic benefits of ending the war would likely take time to fully materialize." Ukraine is relying on external financing to help fund the war effort. Pyshnyi said he expected $55 billion this year which would not only cover the budget deficit but also be used to set aside a public-finance reserve for the coming years, when aid volumes were likely to start declining. "We project Ukraine will receive about $17 billion in 2026 and $15 billion in 2027," said Pyshnyi. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
Reuters
07-05-2025
- Business
- Reuters
Exclusive: Ukraine considers shift from dollar to euro amid geopolitical realignments
Summary Hryvnia was launched in 1996, and over the decades has used the dollar as the reference currency EU membership talks influence Ukraine's currency considerations Ukraine expects $55 billion in external financing for 2025, central bank chief Pyshnyi says LONDON, May 7 (Reuters) - Ukraine is starting to consider a shift away from the U.S. dollar, possibly linking its currency more closely to the euro amid the splintering of global trade and its growing ties to Europe, Central Bank Governor Andriy Pyshnyi told Reuters. Potential accession to the European Union, a "strengthening of the EU's role in ensuring our defense capabilities, greater volatility in global markets, and the probability of global-trade fragmentation," are forcing the central bank to review whether the euro should be the reference currency for Ukraine's hryvnia instead of the dollar, Pyshnyi said in emailed remarks. "This work is complex and requires high-quality, versatile preparation," Pyshnyi added, in the most direct comments by a Ukrainian official on a possible shift. The dollar dominates international trade and accounts for the majority of global reserves, opens new tab. Major economies including Saudi Arabia and Hong Kong peg their currencies to the dollar. But under President Donald Trump, the U.S. has unleashed a trade war by introducing what could be the highest tariffs in a century, a move that has prompted some observers to question the future role of the dollar as global reserve currency. Now in the fourth year of fighting an invasion by Russia, Ukraine has also seen Trump temporarily cut off some military assistance to the country. European leaders, including from the EU, have vowed to strengthen Kyiv's army to ensure it can be the cornerstone of future security in Ukraine but progress has been difficult. Meanwhile, Ukraine struck an agreement that gives the United States preferential access to new Ukrainian mineral deals and which funds investment in the nation's reconstruction. Since Trump's return to the White House, the greenback (.DXY), opens new tab is down more than 9% against a basket of major currencies as investors pull back from owning U.S. assets. Some experts warn against associating the strength of the dollar to its reserve-currency status. Yet historically, dollar holdings have been linked to security alliances and military ties, opens new tab to Washington. Transactions with the U.S. dollar continue to dominate all segments of the FX market, said Pyshnyi, but the share of euro-denominated transactions has been rising in most segments though "so far moderately." He did not elaborate. Ukraine launched the hryvnia in 1996, and over the decades it has used the dollar as the reference currency. Immediately after Russia's invasion in February 2022, the central bank imposed capital controls and pegged the hryvnia at an official rate of about 29 to the U.S. dollar. Ukraine was forced to devalue later due to a buildup of fiscal imbalances. In October 2023, the central bank moved from a firm peg to a managed exchange-rate regime that uses the U.S. dollar as the reference - the gauge to measure FX interventions and for smoothing fluctuations in the exchange rate. The EU opened membership talks with Ukraine and Moldova nearly a year ago, although a long and tough road lies ahead before it could join the bloc. EU President Ursula von der Leyen said in February that Ukraine could be in by 2030 provided it continued to enact reforms to its political and judicial system at the current pace. In preparation, Moldova switched its reference currency for the Moldovan lei to the euro from the dollar on Jan. 2. A revival of investment and consumer activity thanks to closer links with Europe and economic normalisation would help economic growth pick up slightly over the next two years to 3.7-3.9%, Pyshnyi said, though much of the economic trajectory depends on how the conflict develops. "A quick end to the war would clearly be a positive scenario with good economic outcomes if it were to incorporate security guarantees for Ukraine," Pyshnyi said. "Nevertheless, it's crucial to acknowledge that the economic benefits of ending the war would likely take time to fully materialize." Ukraine is relying on external financing to help fund the war effort. Pyshnyi said he expected $55 billion this year which would not only cover the budget deficit but also be used to set aside a public-finance reserve for the coming years, when aid volumes were likely to start declining. "We project Ukraine will receive about $17 billion in 2026 and $15 billion in 2027," said Pyshnyi.
