• Українська
  • Русский
  • English
Where there is no law, but every man does what is right in his own eyes, there is the least of real liberty
Henry M. Robert

The Market Will Prompt. But Who Will Hear?

6 October, 1998 - 00:00


A joke. A meeting is held at the village council. The chairman says,
"There are two ways out of this crisis. The first is realistic, the second
fantastic. The first is that aliens fly over and save us, the second is
that the government helps us."

And now almost seriously. The far-sighted Ministry of Economics has
worked out three scenarios for the developing economic situation. The first
one calls for instating all anti-crisis measures (ACM), the second implements
ACMs halfway, and the third scenario, according to First Deputy Minister
of the Economy Viktor Kalnyk, parallels that of Russia only on a smaller
scale.

It is quite natural for our somewhat vain government to glorify the
first option, which would keep the currency band at Hr 2.5-3.5 to USD 1
and forecast not more than 7.5% inflation in September. However Economy
Minister Vasyl Rohovy is currently disputing the work done by the Ministry,
stating that the inflation rate could be higher and since "nobody sets
it, the market will prompt it."

So why hasn't it prompted yet? And how, then, should we interpret last
Friday's closing rate of Hr 3.4 to USD 1 at the Inter-Bank Currency Exchange?

The efficiency of the executive powers is really impressive, but it
is far from realistic. On the other hand, the Ministry of Economics is
on the alert and according to Vasyl Rohovy, they are working out new calculations
for any case. Which is a good thing, for according to Vice Premier Serhiy
Tyhypko, the only budget "financiers" (besides taxes, of course) are loans
issued by international financial organizations. And while they are a nice
thing, they are hardly enough for the National Bank to be able to regulate
the exchange rate.

 

Rubric: