Ukraine - Hryvnia's all-time low reflects population's panic
Ukraine's battered currency, the hrvynia, hit a new all-time low. The fear is that a population panicked by a year of revolution and war may drive it to further lows before the currency stabilizes.
The Sept. 23 trade session on the interbank market closed with a rate of Hr 15 per U.S. dollar on the offer side. In the beginning of the year, the hryvnia stood at 8.04 against dollar, which means it devalued by 46 percent against the American currency.
However, central bank's official rate is Hr 13.5 per dollar. The regulator today announced a new prohibition to prevent commercial banks from selling more than $200 to a single person. Those who have to pay off their foreign currency-denominated loans could be an exception. Meanwhile, various websites are offering far larger amounts of dollar cash for those who are willing to pay the premium price.
Olena Shcherbakova, who manages regulator's currency policy, says keeping the artificial hryvnia rate corridor, which was a usual policy for Yanukovych-era central banking, is not an option. "Our foreign partners won't understand us (if we do this)," she said during the Sept. 23 news conference.
The list of partners includes the International Monetary Fund that views currency free-floating regime as a key measure for treating the unhealthy environment of emerging economies like Ukraine. Meanwhile, country may ask the International Monetary Fund for an additional bailout package, since the fund's $17-billion, 3 percent loan just seems not to be enough, the nation's Finance Minister Oleksandr Shlapak said on Sept. 23.
http://www.kyivpost.com/content/ukraine/hryvnias-all-time-low-reflects-populations-panic-365679.html
