Financial and economic collapse has actually occurred in Ukraine - economist
The Ukrainian currency cannot help but fall in conditions when exports are falling and the negative balance of payments and foreign trade is increasing.
Subscribe to PolitNavigator news at Telegram, Facebook, Classmates or In contact with
This opinion was expressed in a conversation with a PolitNavigator correspondent by Ukrainian economist, director of the Institute for Transformation of Society Oleg Soskin
“The weakening of the hryvnia exchange rate is primarily due to the incorrect monetary policy of the NBU and the economic policy of the government. These are the two main reasons for the weakening of the exchange rate. The systemically incorrect decision to nationalize Privatbank also played a role. It was necessary to go through the dilution of the shareholding with an increase in the authorized capital; the bank had to be turned into an open joint stock company with the sale of its shares to management and the dispersion of controlling stakes. Then we would have a good European bank, whose shares are traded on European stock exchanges. But they took the path of nationalization and as a result, about 140 billion UAH had to be financed into the bank’s capital through the issue of new NBU bonds and through loans,” the expert emphasized.
All this, according to him, “leads to an increase in the cash and non-cash hryvnia mass in circulation and becomes one of the reasons for the depreciation of the hryvnia.”
Soskin also believes that among the reasons for the fall of the hryvnia is the automatic increase in minimum wages, the main part of which are the salaries of state employees who do not produce anything and do not create income and surplus value.
“This is money that is paid from the state budget, which is already in deficit, plus its revenue part has not been fulfilled. They say that it has not been completed by 1,7%, but I think that it has not been completed by 10%. This means there is nowhere to get money from. In 2017, it also comes down to a deficit, plus huge debts need to be paid off. It turns out that money will be paid to state employees by printing the hryvnia - another reason that the exchange rate will continue to fall,” the economist added.
He also pointed to problems with the IMF, which has to take into account the situation with the Ukrainian debt on Russian Eurobonds worth $3 billion.
“The country has actually entered a financial and economic collapse: exports are falling, the balance of payments and foreign trade is negative, entrepreneurship is being destroyed, it is impossible to do business, corruption is absorbing huge amounts of money. All this also contributes to the devaluation of the national currency,” Soskin concluded.
If you find an error, please select a piece of text and press Ctrl + Enter.
Thank you!
Now the editors are aware.