The Euro Is Falling; NBU Exchange Rates as of September 21
As of September 21, the National Bank of Ukraine slightly raised the official exchange rate for the dollar and lowered the exchange rate for the euro. The U.S. dollar rose by 1 kopeck to 44.67 hryvnia, while the euro fell by 4 kopecks to 51.19 hryvnia. Meanwhile, the NBU raised its discount rate to 16% per annum, but this does not mean that banks will immediately begin to significantly raise interest rates on hryvnia deposits.
The National Bank of Ukraine set the official dollar exchange rate for Monday, September 21, at 44.67 hryvnia. The day before, on September 18, the U.S. dollar was trading at 44.66 hryvnia. Thus, over the weekend, the official exchange rate for the dollar rose by only 1 kopeck. The situation with the euro is the opposite. As of September 21, the NBU set the euro’s exchange rate at 51.19 hryvnia. On September 18, the euro was trading at 51.23 hryvnia. Consequently, the euro fell by 4 kopecks.
These changes are minor, so it’s not worth talking about a sharp shift in the currency market based on this data. This is simply another daily update of the official exchange rate. At the same time, for people planning to buy or sell currency, even small fluctuations can matter, especially when large sums are involved.
Why the Dollar and the Euro Move Differently
The exchange rates of the dollar and the euro against the hryvnia do not necessarily move in the same direction. Their value is influenced not only by the situation within Ukraine but also by the movements of the currencies themselves on the international market. Therefore, there may be a situation where the dollar rises slightly against the hryvnia while the euro falls at the same time. The NBU’s official exchange rate should also not be confused with the currency price at exchange offices. Banks and exchange offices may have their own buying and selling rates. These depend on supply and demand, market conditions, and the specific institution.
Therefore, the figure of 44.67 hryvnia per dollar does not mean that a person can buy U.S. currency at exactly that price at any bank. This is the official exchange rate set by the NBU. Similarly, 51.19 hryvnia is the official value of the euro, not a guaranteed purchase price for cash currency.
The NBU raised the discount rate to 16%
One particularly important change concerns not foreign currencies, but the hryvnia. On September 17, the NBU raised the discount rate from 15.5% to 16% per annum. The regulator explained the decision by citing heightened inflationary risks, particularly persistent price pressures and secondary effects from supply shocks. The discount rate is one of the NBU’s main monetary policy tools. Through it, the regulator influences the cost of money in the financial system. When the rate rises, the terms for banks to attract and lend funds may change.
For ordinary Ukrainians, this may affect, in particular, loans and deposits. But it’s important to understand that a change in the discount rate does not automatically mean that all bank rates will change the next day. Banks set the terms of their products independently, taking into account their own funding needs, competition, and customer behavior.
Will hryvnia deposits become more profitable?
An increase in the discount rate could create conditions for higher returns on hryvnia-denominated instruments. However, according to financial analyst Andriy Shevchyshyn, there was no noticeable increase in deposit rates following the NBU’s previous decision. The analyst noted that the discount rate had previously been raised from 15% to 15.5%. However, this did not lead to a significant increase in the yields on term deposits. Therefore, now, following the new increase to 16%, he is reluctant to assert that banks will necessarily raise rates sharply.
“It’s possible, but we’ve seen that after the rate was raised from 15% to 15.5%, there wasn’t such a noticeable increase. Consequently, it’s hard to say whether deposit yields will rise following the current increase,” Shevchyshyn noted. In other words, holders of hryvnia deposits shouldn’t expect banks to automatically add several percentage points to all rates following the NBU’s decision. Changes may be gradual or may apply only to certain deposit products. Much will depend on how actively banks seek to attract new funds from the public.
Why Ukrainians Are Reluctant to Put Money into Term Deposits
According to Shevchyshyn, there is a significant amount of public funds in the banking system. However, people are not particularly eager to transfer this money into time deposits. One reason is the desire to have quick access to their savings. Currently, time deposits account for about one-third of the total funds held by the public. The rest of the money is kept in other accounts or in forms that allow for quicker access. For Ukrainians during the war, access to funds may be more important than a slightly higher return.
“People want to have real, accessible money so they can use it in case of an unexpected event or situation. At any moment, something might come up—they might need to buy something or prepare for winter. This isn’t the time for saving and accumulating,” explained a financial analyst. That is precisely why, even with rising interest rates, some people may keep their money in accounts with immediate access. For them, the ability to quickly withdraw or transfer funds may be more important than the extra interest on a term deposit.
What This Means for Depositors
For people who already have a hryvnia deposit, an increase in the NBU’s discount rate does not in itself mean that the bank will automatically adjust the rate under the existing agreement. The terms depend on the specific deposit product and the agreement with the bank.
For those who are just planning to open a deposit account, the situation is somewhat different. Banks may gradually adjust their offers and launch new deposit products with different interest rates. However, this depends on market conditions, so you shouldn’t expect all banks to react in the same way.
It’s also important to look beyond just the annual interest rate. When choosing a deposit account, pay attention to the term of the deposit, the possibility of early withdrawal, account replenishment, and the procedure for interest payments. You should also take into account the taxation of deposit income, since the rate advertised by the bank is not equal to the amount the depositor will actually receive after paying taxes.
Here’s the situation as of September 21
Thus, as of September 21, the NBU set the dollar exchange rate at 44.67 hryvnia and the euro at 51.19 hryvnia. Compared to September 18, the dollar gained 1 kopeck, while the euro lost 4 kopecks. At the same time, the NBU raised the discount rate to 16%. This may affect banking conditions and the yield on hryvnia-denominated instruments, but a rapid and uniform increase in rates across all deposits should not be expected. According to Andriy Shevchyshyn, the previous rate hike did not have a noticeable effect on the yields of term deposits, and the current decision does not yet guarantee such growth.
For depositors, this means that in the near future, it will be important to monitor not only the NBU’s decisions but also the specific offers from banks. After all, it is the banks that will determine whether it becomes more profitable to keep hryvnia in a deposit account.
The spot price of gold rose for the second consecutive session on Friday, reaching a weekly high. According to Asharq Al-Awsat, as of 08:29 GMT, gold had risen 1.1% to $4,387.69 per ounce.
