Shifting Currency Strategy: Ukraine Looks to the Euro

Ukraine is contemplating shifting away from the U.S. dollar and aligning more closely with the euro as a reference currency for the hryvnia, Reuters reported, citing National Bank Governor Andrii Pyshnyi on May 7. This move comes amid threats of broad tariffs by U.S. President Donald Trump, which have unsettled global markets and sparked criticism internationally.

Pyshnyi highlighted that the EU’s increasing role in supporting Ukraine’s defense capabilities, growing global market volatility, and potential trade fragmentation are key factors influencing the consideration of the euro over the dollar. “This work is complex and requires high-quality, versatile preparation,” Pyshnyi told Reuters.

Some European countries outside the eurozone, such as Denmark, use the European exchange rate mechanism to peg their currencies to the euro, aligning with the EU’s Economic and Monetary Union framework.

Ukraine’s pivot toward the euro also aligns with its ongoing EU accession talks. Prime Minister Denys Shmyhal announced on April 9 that Ukraine had fulfilled 81% of its obligations under the Association Agreement with the EU. “We are proving once again that we can efficiently and quickly move toward EU membership. This year, we plan to open all six clusters in the accession negotiations and deepen sectoral integration,” Shmyhal stated.

On April 1, EU officials launched the Ukraine2EU program, allocating 16.7 million euros ( million) to support Ukraine’s EU membership aspirations.