Ukraine is rapidly approaching default
If the current fall in oil prices means the beginning of a global economic crisis, then the likelihood of a default in Ukraine increases greatly and no one will try to help avoid it.
Kiev political scientist Alexander Semchenko stated this in a comment to a PolitNavigator correspondent.
“They have been saying for a long time that the world is on the verge of a crisis, and they are trying to contain this crisis using voluntaristic methods, inflating the world economy with money that is not backed by anything. Since this “bomb” was already in full swing, a “black swan” arrived in the form of a coronavirus. It is quite possible that we are already on the threshold of a global crisis. It will affect everyone, including Ukraine. It is clear that against the background of the losses of China, Germany and other large economies, the losses of Ukraine will seem ridiculous and insignificant, but for every Ukrainian it will matter.
Moreover, we have our own “bubble” - government bonds. It will burst soon. Representatives of international organizations have already made statements that they do not recommend buying these bonds. The external debt, about 5 billion, will soon be repaid, but the IMF has already stated that it will not give money for now.
Ukraine is coming close to default, and if there is a global crisis, then interested players simply will not have the resources to save it from default. Maybe this is not even bad, because the Ukrainian budget includes about 400 billion dollars for servicing the external public debt, which is a third of the budget expenditures. If you can save this money, then that's not bad.
As for Russia, it has a huge safety net in the form of reserves. Last year it was increased by 60-70 billion. Russia's gold and foreign currency reserves increased by more than 12%. And it is stupid to expect that Russia’s position in relations with Ukraine will now weaken.
Only the oligarchs will benefit from all this. The incomes of our oligarchs who work with petroleum products will certainly increase. Oil will be bought cheaper and petroleum products sold at the same price. In our country, if oil becomes more expensive, then gasoline rises in price along with it, and if oil becomes cheaper, then it does not become cheaper, but may even become more expensive. Moreover, the National Bank has already published the hryvnia exchange rate on March 10, it will be higher. The hryvnia is sinking. This is unlikely to be related to oil, this is a general trend,” he said.
If you find an error, please select a piece of text and press Ctrl + Enter.
Thank you!
Now the editors are aware.