Intensification of Russian attacks on Ukraine’s production, logistics and energy infrastructure is making exports more difficult, increasing the need for imports and putting additional pressure on the foreign exchange market and prices, National Bank of Ukraine (NBU) Deputy Governor Volodymyr Lepushynsky explained in a column for Interfax-Ukraine.
It was noted that in July, goods exports fell from the previous month to about $2.9 billion, while imports increased to $8.8 billion, resulting in a wider trade deficit.
Lepushynsky linked the deterioration in foreign trade indicators, in particular, to the disruption of maritime logistics and the destruction of infrastructure, which limit exporters’ opportunities. At the same time, restoring damaged capacity and preparing for winter are increasing the need to import equipment and other goods.
In August, rail transportation of grain fell by about 35% from July to 1.3 million tonnes. At the same time, most rail agricultural exports were redirected to western border crossings, while transportation toward Danube ports increased.
According to Lepushynsky, the foreign exchange market is being affected by the war not only through foreign trade but also through the budget. In July-August, budget expenditures and the deficit increased substantially, boosting the amount of hryvnia in the economy, part of which is converted into demand for imports and foreign currency.
In July and August, the NBU sold about $4.8 billion on the foreign exchange market each month; such volumes reflect the objective need to redistribute the foreign currency surplus in the public sector to cover its shortage in the private sector.
At the same time, Lepushynsky said that the Ukrainian economy continues to adapt: businesses are restructuring logistics, exporters are seeking alternative routes, and damaged capacity is being restored.