Ukrainians are diversifying their savings and investing more in euros amid falling demand for the dollar, the National Bank of Ukraine’s (NBU) Deputy Governor Yuriy Heletiy told Kyiv Post during a briefing with journalists on Thursday.
The trend echoes the dollar’s losing popularity on the global market after US trade disputes and rising geopolitical tensions.
“Over the last few months, we have observed a decrease in demand for сash foreign currency. I would note that the decrease was more pronounced for the dollar. In April, a demand for cash dollars in Ukraine was estimated at $58 million, it decreased to $10 million. This is a significant decline,” Heletiy told Kyiv Post.
Ukraine’s central bank does not observe the same decrease in demand for cash euros, Heletiy said.
Since Ukraine does not have a stock market for retail investors, Ukrainians have limited options for savings: deposits, government bonds and cash foreign currency bought physically or via bank apps.
That said, euro purchases remain modest, Heletiy told Kyiv Post.
The euro purchases remain limited in scale compared to the beginning of the year volumes and compared to dollars.
“Net demand for the euro stands at $190 million [monthly]. These are modest volumes. Let’s compare it with the beginning of this year – net demand for dollars stood at approximately $900 million, net demand for euros at €365 million,” Heletiy said.
Despite modest volumes, the deputy central bank governor explained that the shift indicates Ukrainians are beginning to favor euros over dollars as an asset for savings.
“People are diversifying and investing in euros, but again, these amounts are not significant for our market,” he said.