Managed flexibility is an exchange rate regime where the market sets the rate and it moves both ways, while the central bank smooths sharp swings.
Managed flexibility is an exchange rate regime in which the rate is set by market supply and demand and can move both ways, while the central bank prevents sharp jumps. There's no target rate; the NBU only smooths swings with FX interventions.
In Ukraine this regime has been in place since 3 October 2023. Before that, from 24 February 2022, the rate was fixed: first at 29.2549 and from 21 July 2022 at 36.5686 UAH per dollar. The NBU explained the switch by saying a long fix accumulates imbalances and creates a false sense of stability.
Managed flexibility differs from a free float in the NBU's active involvement: during the war the market has a structural currency shortage, and without interventions the hryvnia would keep weakening.
In detail, with examples: What drives the hryvnia exchange rate and how the NBU sets the official rate
FX intervention Interbank market Devaluation
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Three rates, the official rate formula, regimes 2013-2026, currency supply and demand, interventions and reserves, the key rate, inflation, myths and what to do with savings.