The Circulation of US Dollars and the Black Market in Foreign Exchange in Ukraine


By: Oleksandr Zholud, Iryna Piontkivska, Centre for Economic Strategy

The Ukrainian economy is highly dollarized, which complicates the monetary policy and decreases the amount of resources available for investment. In 2014-2015, due to the inflation spike and the devaluation of hryvnia, the demand for foreign currency was bound to increase. However, according to the official data, Ukrainians decreased the foreign currency purchases by 15-20 times. It shows that foreign exchange transactions have mostly shifted to a “blind spot” for the regulator and official statistics. This happened due to the rapid development of black market after the National Bank of Ukraine introduced severe foreign exchange controls. We have tried to assess the size of the black market in foreign exchange in Ukraine and to determine to what extent Ukrainians use foreign currency.

Full text is available in Ukrainian and Russian

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