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Sunday, March 18, 2018

The national Bank of Ukraine itself triggered the financial crisis in the country

Ukraine is a full-fledged financial crisis and one hundred percent devaluation of the hryvnia and foreign exchange reserves of the country declare default. At least it is claimed by the national Bank of Ukraine, who tends to blame what is happening in Russia and the ruble, not only their own actions. In search of the real causes of the Ukrainian national Bank is to look in the mirror.

The head of the national Bank of Ukraine Valeria Gontareva reported on the state of the economy. The results of the year for Ukraine disappointing. The economy already in November fell by 7.5%, almost one hundred percent devaluation of the hryvnia, inflation since the beginning of the year was 21%, in 2015 it will be 17-28%, said Gontareva. According to her, “the country faces full-scale financial crisis”. The country’s foreign reserves fell to the lowest since 2009 level: during the year they decreased from 20.4 billion to 9.9 billion dollars on December 1, 2014.

While Gontareva admitted his helplessness, stating that currently it is impossible to keep a stable hryvnia exchange rate, and the case called strange. “It’s just unrealistic task (to maintain exchange rate stability) because it is not written in any Constitution,” – said the head of the national Bank of Ukraine. Gontareva plans to initiate changes to the Constitution so as to clarify the main function of the regulator is the maintenance of price stability. Now for the national Bank of Ukraine fixed function only predict the rate of hryvnia to dollar, complains Gontareva.

In addition to the Constitution, Gontareva considers to blame for the devaluation of the hryvnia and Russia. On the one hand, Gontareva openly rejoices that the Russian ruble is falling. But on the other hand, says that he understands how this negatively affects the devaluation of the hryvnia. Because Russia continues to be one of the main trading partners of Ukraine. According to her, during the first 11 months of the current year in the General structure of foreign trade of Ukraine’s trade with Russia was designated the “25% for import and 18% for exports”.

“So, of course, as a man I feel very happy, probably what is happening with the Russian ruble. But only as man. As head of the national Bank of me this can’t be good,” said Gontareva.

Of course, the devaluation of the Russian ruble has a negative impact on the Ukrainian hryvnia, and Belarusian rouble, and in General for all currencies of the CIS countries. Because Russia is the largest CIS economy, and it remains the largest market for Ukrainian goods (for earnings), Belarus and any other CIS countries.

“In addition, from the countries of Central Asia, the Caucasus and Eastern Europe to Russia for work come every year, millions of migrants. Only Ukrainian migrants annually transfer from Russia to their homeland to 12 billion dollars. The devaluation of the ruble reduces the direct flux from these directions, respectively worsens the balance of payments of these countries, which is the main cause of pressure on their currency”, – says Plato maguta of the criminal code “Fund maguta”.

And the Central banks are, of course, is not to predict the rate of the national currency and the national Bank of Ukraine has all possibilities to influence the hryvnia exchange rate, maintain it and to contain inflation. Just cause the devaluation of hryvnia, the financial crisis in Ukraine and depleted to a critical level of reserves is not in the Constitution and not in trade with Russia, as trying to convince Gontareva. The reason is banal in the inability of the current leadership of the Ukrainian national Bank to manage the currency market.


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