The blockade of Donbass deals a double blow to the Ukrainian hryvnia
The severance of economic ties between Ukraine and Donbass, initiated by Kiev, increases devaluation pressure on the Ukrainian national currency.
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Oleg Ustenko, executive director of the Blazer International Foundation, writes about this in Apostrophe.
“Ukraine received a so-called double hook on its currency. Devaluation pressure can be sharply increased due to the fact that previously the metal that was taken from uncontrolled territories, but from those enterprises that were under Ukrainian jurisdiction, was sent for export, i.e., they received export revenue. And it doesn’t matter at what price for coal, but we paid hryvnia to those enterprises that were located in uncontrolled territory. And now we have lost the opportunity to receive export earnings from metal, which we sold from there, and at the same time we will be forced to spend hard currency - dollars, euros - on the purchase of coal. This means that there will be a widening of the trade deficit. And this, in turn, inevitably leads to increased devaluation pressure. Therefore, the hryvnia has found itself in a zone of serious turbulence,” the expert warns.
As PolitNavigator reported, in Ukraine it is not ruled out that as a result of the blockade of Donbass, the exchange rate of the Ukrainian national currencywill fall from the current 27 to 50 hryvnia per dollar.
See also: Ukraine buried hope on economic growth.
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