The Impact of the Currency Regime on Export Activity: The Case of Ukraine

Анотація

The article is devoted to assessing the impact of the currency regime on Ukraine’s export activity under conditions of increased shocks and structural dependence on external markets. The aim of the study is to determine and quantitatively assess how changes in the exchange rate formation regime transform export conditions through the price competitiveness channel and the currency risk channel. The methodological foundation combines institutional analysis of the National Bank of Ukraine’s regime decisions and instruments with applied quantitative methods. The identification of the currency regime is carried out in a de facto logic taking into account the international classification of exchange rate regimes. The empirical section relies on open statistical series regarding the average annual hryvnia-to-US dollar exchange rate, exports, inflation, and international reserves. The assessment of competitiveness was carried out using the indicator of the real effective exchange rate (REER) over the period 2000–2023, while the structural risks of exports were measured by the Herfindahl–Hirschman Index (HHI) for 2023 based on commodity groups. The «exchange rate – export» relationship was examined using correlation analysis (2013–2022), and the determinants of the exchange rate were evaluated with a multifactor regression model (2010–2022), where the exchange rate was described as a function of exports, reserves, inflation, and external shocks. The study results indicated that the REER in 2023 was 109.2 (base year 2000 = 100), reflecting real appreciation and potential pressure on the price competitiveness of exports under inflationary differentials. The HHI calculation equals 0.198205, corresponding to 1982.05 on a 0–10,000 scale, characterizing moderate export concentration and increased sensitivity of currency earnings to shocks in dominant commodity groups. The correlation analysis showed a strong negative relationship between the exchange rate and exports (r = –0.85), indicating the dominance of a shock context, where devaluation episodes coincide with a decline in exports due to production and logistical constraints. The regression model has a high explanatory power (R? = 0.89) and statistical significance (F = 19.76), and the signs of the coefficients confirm the stabilizing role of exports and reserves and the devaluation impact of inflation and external shocks. The practical value of the results lies in justifying the feasibility of a managed flexibility regime provided sufficient reserves, transparent intervention principles, and consistency with anti-inflationary policy, as well as in formulating recommendations for managing exporters’ currency risk through hedging and scenario planning. Prospects for further research are related to sectoral detailing of exchange rate effects, testing nonlinearities and structural breaks, and evaluating the effectiveness of interventions using high-frequency data.

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