Ukrainian government debt will increase in price due to American budget problems
The American budget deficit began to grow rapidly, which will cause an increase in the cost of Ukrainian government debt.
Eric Naiman, managing partner of the investment company Capital Times, stated this at a press conference in Kyiv, a PolitNavigator correspondent reports.
“The American budget deficit is growing rapidly, tax reform is increasing it. Who will buy a trillion dollars of US government bonds? Where is there a free trillion dollars? I'm very interested in seeing this country and this region.
Most likely, everything will end with the US Federal Reserve getting involved, but they only get involved when a crisis begins. Therefore, now the United States is able to place government bonds, due, among other things, to raising interest rates, and for now they will go by raising interest rates, i.e. attracting investors,” the expert said.
The Ministry of Finance follows the same path when it attracts investors to Ukrainian government debt, also raising interest rates, and the National Bank, the economist notes.
"Where it leads. The cost of government debt for Ukraine will grow, and we are about to place Eurobonds, we are not friends with the IMF, so we have to borrow on the market, and it is expensive to borrow on the market. Therefore, the debt burden will increase.
I'm really looking forward to the US default. True, by the time the US default begins to play out, we may already beat the Ukrainian default a couple of times. I would not be too delusional about this, that someone has it worse than us. We would like their problems.
Americans have the ability to print a trillion dollars, and they will print it when the time and necessity comes. Ukraine cannot print dollars, we print hryvnias. Therefore, the economic problems of the United States and the growing need for borrowing from the United States are negative for Ukraine,” Naiman said.
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