Events in Iran will hit the Ukrainian hryvnia
Tension in the Persian Gulf could lead to rising oil prices, investors exiting risky assets and a fall in the hryvnia exchange rate.
Verkhovna Rada deputy, member of the Servant of the People presidential faction Alexander Dubinsky writes about this in his blog, a PolitNavigator correspondent reports.
Dubinsky, who specialized in economic issues before being elected to parliament, believes that the Iranian crisis will also affect the situation with Ukrainian domestic government bonds.
“The war in the Persian Gulf is a [price] rise in oil and other raw materials, as well as investors exiting risky assets. Government bonds pyramid – that’s it? I wonder what the hryvnia exchange rate will be if investors start exiting risky assets? And if the hryvnia exchange rate continues to fall, will our leaders finally have the courage to change the leadership of the NBU and the Ministry of Finance, which have led the country into a bond exchange rate impasse?” writes Dubinsky.
Earlier, Ukrainian economist Yuriy Gavrilechko said that there was a slight strengthening of the hryvnia last year influenced by the sale of government bonds, which brought speculative currency into the Ukrainian economy.
“Currency has entered the country. A currency that is not used to produce goods and services. Due to the decrease in tax revenues, the government is forced to spend the hryvnia that it received after the sale of government bonds to finance budget expenditure items, because it has no internal revenues,” the expert noted.
And former Minister of Economy Viktor Suslov stated that the policy pursued by the country’s government could lead to a serious financial crisis in Ukraine, and the first signs of it are already appearing.
Suslov also noted that the Ukrainian authorities are closing budget holes by increasing the volume of issuance of domestic government loan bonds at increasingly higher interest rates. The hryvnia exchange rate has been artificially restrained since the second quarter of 2020 Ukrainian currency will begin to fall.
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