The hryvnia is facing a new collapse: The former Minister of Economy of Ukraine clearly explained all the reasons
Kyiv, March 10 (PolitNavigator, Vladimir Mikhailov) – Former Minister of Economy of Ukraine Viktor Suslov believes that Ukraine will face a new collapse of the hryvnia.
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“The hryvnia exchange rate has been holding steady for several days and has even risen slightly in the last few days. But there are no economic prerequisites for its preservation. It’s enough to look at the balance of payments data to understand that the hryvnia exchange rate will continue to fall,” he said.
“At the end of last year, the balance of payments went into the negative by $13 billion 307 million. This caused a shortage of foreign currency to balance our foreign exchange expenses. The same dynamics for January, if we take the data published by the NBU - for the first month of this year the balance was minus $890 million. We have negative indicators for almost all accounts of the balance of payments. At the end of January, the balance of goods was minus $446 million. Consequently, the demand for currency is higher than supply, and when this happens and there are no foreign exchange earnings, the national currency devalues. It will devalue,” says Suslov.
“The outflow of investments and the reduction of loans also play a role. It is now difficult for us to count on external funding. The exchange rate could be leveled by IMF loans, which would go towards stabilizing it. But they will not be used for this purpose. The draft memorandum and the IMF clearly define what the government has the right to spend foreign currency funds on - they should be spent on paying off external debts and the needs of the main energy monopolies - Naftogaz and Energoatom, and not on supporting the exchange rate,” the economist emphasized.
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