Tens of billions of hryvnia thrown by the state to save Privatbank could collapse the hryvnia exchange rate - Bortnyk
The exchange rate fluctuations of the hryvnia were primarily affected by the nationalization of PrivatBank.
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This confidence was expressed in a comment to PolitNavigator by Kiev political expert, director of the Ukrainian Institute for Policy Analysis and Management Ruslan Bortnik.
“Privatbank received 44 billion in additional capitalization from the NBU and this could not but affect the foreign exchange market. The second factor is systemic, this is the balance of payments deficit of Ukraine. There is no final figure yet, but it ranges from 1 to 2 billion dollars. More currency left the country than came in. This also puts pressure on the market and the exchange rate. The third reason is technological, this is the holiday period, not only in Ukraine but also in other countries. Banks do not work or do not work fully, so for many Ukrainian importers there is a shortage of foreign currency when they need to make transactions at the beginning of the year. The fourth reason is general political instability and ongoing economic depression, ongoing capital outflow,” he says.
According to Bortnyk, the current depreciation is quite controllable, but if the state continues gigantic financial injections into the sinking Privatbank, and if Ukraine does not receive loans from the IMF, then against the backdrop of the huge costs of nationalizing PrivatBank and huge military costs, the hryvnia, of course, will continue to depreciate.
“The situation is aggravated by the fact that the government has included in the budget an absolutely unrealistic exchange rate - 27,2 UAH per dollar. Last year they set it at 24,1 and ended up at 27,5-28. And the fact that the government continues to include an unrealistic exchange rate in the budget undermines business confidence in the actions of the government and the NBU, which is an additional psychological factor for destabilizing the currency,” says the expert.
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