Ukraine's central bank devalued the hryvnia currency by 25% against the U.S. dollar on Thursday because of the impact of the war with Russia.

It said it had set the new hryvnia rate at 36.5686 to the dollar.

The bank said in a statement that it had acted "in view of the change in the fundamental characteristics of Ukraine's economy during the war and the strengthening of the U.S. dollar against other currencies."

The bank also said that the devaluation would aid the "competitiveness of Ukrainian manufacturers ... and support the stability of the economy in wartime conditions."

The devaluation comes a day after Ukraine asked its creditors for a two-year payment freeze on its international bonds in an attempt to focus its dwindling financial resources on repelling Russia.

At the end of 2020, Ukraine had $130 billion in external debt outstanding, according to World Bank data.

Ukraine has earmarked nearly $20 billion in international dollar and euro-denominated bonds maturing from 2022 to 2030 to be subject to the debt freeze.

Due to the effects of the war, Ukraine's economy is expected to contract in the range of 35%-45% for 2022.