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Donbas blockade’s influence on Ukraine’s currency to be minor, - NBU
15:32, 21 March 2017
Donbas blockade’s influence on Ukraine’s currency to be minor, - NBU

The deterioration of the payment balance will affect the volume of net purchases of foreign currency in the market to replenish reserves, according to the National Bank of Ukraine.

15:32, 21 March 2017

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The temporary ban on cargo transportation across the delimitation line in Donbas has a limited influence on Ukrainian currency, hryvnia, according to the National Bank of Ukraine. This was stated in the message on NBU official site.

“The influence of the Donbas trade blockade on exchange rate will be limited. The deterioration of the payment balance will affect the volume of net purchases of foreign currency in the market to replenish reserves,” the statement says.

Because of this, the NBU downgraded its prediction for international reserves in 2017. In particular, the prediction dropped from 21,3 billion dollars to 20,8 billion dollars.

Related: Blockade of IMF tranche for Ukraine: Why the Fund took a timeout

Also, the National Bank lessened its prediction for deficit of balance of payments’ current account in 2017 from 3,5 billion dollars to 4,3 billion dollars.

Earlier it was reported that the railway blockade of Donbas began back in late January 2017. Then some representatives of individual volunteer battalions, together with a group of people's deputies, began blocking the railway communication between the occupied part of Donbas and the rest of Ukraine, among other things, taking the railway tracks into pieces.

Related: IMF postponed its meeting in connection with Donbas blockade

The authorities responded with a lengthy information campaign about the harm of the blockade. A number of deputies from the "Bloc of Peter Poroshenko" (BPP) and Prime Minister Groisman unanimously declared that the blockade of Donbas would lead to an economic catastrophe.

Related: National Bank of Ukraine to reconsider macroeconomic forecasts for IMF due to Donbas blockade

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