EU to Allocate €140 Billion to Ukraine: When to Expect Funds and What the Rate Will Be.

EU and IMF: Credit Support and Hryvnia Devaluation

According to inkorr.com: The European Union is working on concluding a credit agreement amounting to €140 billion for Ukraine, utilizing frozen assets of Russia. At the same time, the International Monetary Fund is considering the possibility of a 'gradual' devaluation of the hryvnia as part of a new support program. These measures could significantly impact the currency market, so they need to be carefully analyzed.

Financial expert Oleksiy Kozyrev believes that the credit from European funds, secured by Russian assets, will contribute to Ukraine's financial stability. It is expected that the total amount of credit will be €140 billion, but the implementation of the agreement may be delayed until 2026.

€140 Billion from the EU: Hopes and Reality

'Ukraine will receive about €140 billion in the form of new loans from the frozen assets of the Russian Federation,' explained Kozyrev.

One of the conditions for this credit is the return of the funds only in the event of Russia paying reparations for the war. If this does not happen, the funds will become non-repayable assistance. The preparation process for the allocation of funds may be prolonged due to bureaucratic procedures in the EU until mid-2026.

IMF Pressure and 'Gradual' Devaluation

'The IMF forecasts an average dollar rate of 45.4 hryvnias per dollar in 2026,' emphasized Kozyrev.

Also crucial is the IMF's support for the gradual weakening of the hryvnia to stimulate exports and reduce the negative trade balance, which could reach $38-40 billion by the end of the year. The weakening of the hryvnia will also help replenish the budget through increased customs duties and positive revaluation of the NBU's reserves.

Debts, Risks, and Balance of Interests

'If there is significant devaluation, it will lead to a substantial increase in our external debt in hryvnia equivalent,' the expert stressed.

The government and the National Bank are trying to avoid sharp devaluation due to the structure of the state debt, where a significant portion of the funds are denominated in foreign currency. A sharp fall of the hryvnia could cause panic among the population and lead to rising inflation.

Exchange Rate Forecast until the End of 2026

'The devaluation of the hryvnia to the dollar will be in the range of about 45-46 hryvnias by the end of 2026... For the euro, I would currently aim for a level of around 50-51 hryvnias per euro by the end of 2026,' noted Kozyrev.

Oleksiy Kozyrev calls on the government to find a compromise regarding devaluation, to carry it out slowly and in a controlled manner. However, the risks associated with the duration of the war and high military expenditures will require new financial solutions.

Thus, the communications of the EU and the IMF regarding the financing of Ukraine and the potential weakening of the hryvnia indicate efforts to improve the financial situation through additional support and regulation of the currency market. It is important to avoid sharp fluctuations in the exchange rate to maintain stability and prevent social problems.