Ukraine's hryvnia out of safety margin: What's next?

Author : Oleksiy Kushch

Source :

The coronavirus quarantine became the trigger for our economy that brought down the Ukrainian markets and hit the hryvnia
12:45, 30 October 2020

Revenues of Ukraine's state budget

The coronavirus quarantine became the trigger for our economy that brought down the Ukrainian markets and hit the hryvnia. New problems were added to the old problems: bankruptcy of medium and small businesses, rising unemployment, and a sharp drop in the living standards of Ukrainians.

Apparently, the trend for the 2021 year will also not be favorable for hryvnia, because the national currency is the first to pay for all the mistakes of the Cabinet of Ministers and the Verkhovna Rada. The instability of the hryvnia exchange rate is potentially very dangerous, therefore, financially wealthy Ukrainians will not stop holding US dollars and euros.

To be honest, the fate of the Ukrainian markets is gloomy, even greater shocks might be ahead, and given the alarming macroeconomic indicators, the government should not delay the start of negotiations on the restructuring of the state debt, otherwise, the state budget will start to fall apart in the first quarter of 2021.

A loan from the International Monetary Fund will not save us, and the regions will continue to ask for financing. The printing presses are actively working. And everyone only demands to place OVDPs in order to fulfill social obligations.

All of the above, in 2021, hryvnia would fall. And we can easily take a trip by a time machine in 2015-2016: the US dollar exchange rate will exceed UAH 29. But if USD leaves for the level of UAH 30, then the inflationary background might change quite dramatically.

To be completely honest, in the current conditions it is only worth keeping only that little amount of cash in hryvnia that is needed for life, the rest must be transferred to other assets. This is what major officials and politicians do today. Apparently, they know or have a presentiment of what the rest of the Ukrainians do not know or about which on the eve of the upheavals of the next year - 2021 - they have not yet guessed.

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