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MORE HRYVNIAS, LESS MONEY Our national currency continues to slide

10 March, 00:00

Despite of investors' predictions of inflation the hryvnia will return to the limits of its currency corridor. Presidential aide on economics Valery Lytvytsky was able to comment. He called canceling the sixth installment of the stand-by credit and coming parliamentary elections the main reasons for devaluation predictions. Simultaneously he noted that hryvnia's slide is gradual and not precipitous, which could be due to certain NBU actions.

Lytvytsky claims that the hryvnia has every chance to return to the limits of the currency corridor announced for the first half of 1998 (Hr 1.95:$1). In support of this he cited the facts that GDP stopped falling in January and exports rose.

However, the experts say that this caused only by the hryvnia's devaluation. According to them, the commercial banks will have to pay for it. Presently, no one would want to take Yushchenko's place, who was forced to quit defending the hryvnia and the poorest strata of the population who suffer most from inflation.

In any case, the hryvnia continues to decline beyond the limits envisioned by the corridor for the first half of 1998. The population, whose nominal income has grown 36.9% compared to last December, received pretty much devaluated paper. The hryvnia exchange rate fell 4.6 % in February on the Inter-Bank Currency Exchange, compared to a 2.2% decrease during last week. On Monday March 2 the hryvnia was 2.0229 to the US dollar, falling Hr 0.03 from the previous Friday. Experts at the exchange predict stabilization by the end of the week.

At present currency exchange is a speculative paradise, and a record 42 banks took part in bidding.

Newspaper output №:

№5, (1998)

Section

Economy