Hryvnia breaks antirecords

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kerbstone market in Ukraine

There is one of the most objective and transparent indicator of the inner economical "health" of the state – exchange rate of national currency.

How does it works

We live, fortunately or not, in the very complicated capitalistic market world and must obey definite market laws. American dollar is now the main exchange currency, something like standard, which determine the overall situation on the global market and any other currencies are just affiliated with it and nothing more but just a dollar in another wrapper. But all the currencies shows not only ratio to dollar on the exchange but also stability of the inner market and the economy in total. 

Different currencies circulation and interconnection

There is no secret that Ukraine is very weak in the economical regard. At the very obtaining of independence Ukrainian hryvnia had a good exchange rate to dollar (almost 2 to 1) but with every crisis this gap was aggressively increasing. And after 20 years this rate was 8 to1 approximately. And after Maidan story we now have the course near 13 to 1. And this is not the final and stable situation. Hryvnia has all the reasons to fall down more and more unfortunately. Why?

 

What`s wrong with the currency?

For a long time after the Independence day Ukraine retained good economical and technological relations with Russian Federation and Belarus what let it to procure decent level of GDP and overall national product. Trade balance with Europe always was negative. As for USA, Ukraine was only the exporter of this country production. So when Ukraine (rather its corrupted government) claimed about plans of uniting with EU which means automatic degradation of relations with countries of CIS, it was a real surprise to known Ukrainian and foreign economists. Ukraine did not create any significant technology or industry which can be a locomotive of national economy; everything we have is obsolete and needed for repair and replacement. Nice slogans about Europe and democracy will never made our people rich.

So now we have currency which is barely supported by national product in a pre-default country with lawlessness, catastrophic social situation, illegitimated government and Civil War in it, which is, evidently, doesn`t plays into the hand of national currency. Where is that lifespring which can bring back Ukraine and its currency to life?

 

Credits

Of course, if you haven`t got any real technologies, competitive industry, gas or oil sources, you have to sell other resources and agreed the credits on any terms. And now Ukrainian government find nothing more clever than just take IMF credits on their very strict terms for social sector of our country. But it is not the very sense. The most funny, these credits are not sufficient to control the economy of the state. It`s enough to pay social payables only. Another words – hryvnia, as Ukraine in total are doomed. Here is why.

National Bank has agreed with the IMF, a number of administrative restrictions on the foreign exchange market, which should contribute to the stabilization of the situation with the exchange rate of the hryvnia. 

 

Gontareva gives hope

Valeria Gontareva, Head of NBU


"We agreed with the (mission) of the IMF, some additional administrative measures that are going to enter the market", – ZN.UA quotes the words of the Head of the NBU Valeria Gontareva.

The decision, which is now preparing the NBU, will be "legalized" existing capabilities of the National Bank, which previously regulator has made "by hand". 

For example, the National Bank of Ukraine in late August checked contracts for their integrity, now this process will happen automatically: "Now we do check the contracts in order to cut off the illegal operations. In the new ruling, we spelled out operations for the withdrawal of capital through securities. We now can wrap up a deal if we have it in doubt. The resolution is simply legalized what such contracts can not perform. And the bank will not miss them already. Now we just stop it and start checking … Before we did it manually, and now it will happen automatically. "

The corresponding decree was agreed with the leaders of the 40 largest banks in the meeting last Wednesday, 17 September. At the moment the document is almost ready and is awaiting publication in the near future.

 

She also stated to "Left Bank" that growth of the dollar on the interbank currency trading can be caused by even a relatively "minor" transaction size of 50 thousand dollars, which will be held at the overvalued exchange rate. 

So, Gontareva noted that the quotes in the interbank market "have little to do with the actual situation on the market." 

– We have a daily turnover of interbank foreign exchange market today, about 200-300 million, most of whom are customers locked inside the bank at 12.90. Yes, there are 48-50 million interbank, and some kind of a funny deal worth 50 thousand dollars, occurring at the rate of 14.80 UAH / USD, leads to the fact that the entire market is abuzz that the quotes are at 14, 80, – she said. 
It is also noted that on 19 September, the National Bank held an auction to sell dollars, the rate cut of 13.55 hryvnia for one dollar. 

In addition, Gontareva said that the International Monetary Fund sent to Ukraine currency experts who will assist the National Bank to stabilize the interbank market. 

It is also worth noting that "Naftogaz of Ukraine" in September 2014 will buy foreign currency directly from the National Bank of Ukraine. It is planned to sell about 426 million dollars. 

Earlier Gontareva stated that "all those who are buying the currency now," will regret it.

And now look at the graphs and think what will be further:

hryvnia to dollar rouble exchange rates for last month hryvnia to Russian rouble exchange rates for last month hryvnia to Euro exchange rates for last month

As you see, Euro rate today almost broke the absolute record: 17,43 – 18,88.

Black market

Of course Gontareva is lying. Lying to try to stabilize the agonizing market and currency rate, trying to affect Ukrainian businessmen and rich people do not to buy dollars, to prevent collapsing banking system now and today. Of course, the NBU doesn`t control the situation. It hadn`t been controlling it for a long time ago (appr. from 2005-2006 year) so it is not the surprise. Just another lie from the totally deceitful maidan government. Everything in the best trend. And it`s not even interesting.

Interesting is the creation of big black market where you can really exchange your hryvnias to dollar and backwards. And there we have drastically discrepant from NBU and other bank currency rate. But unlike banks where you will never exchange your money because of "dollar lacking" or "new rules of exchanging not allow us to give more than hundred dollars in one hands" and other restrictions, here you can exchange any amount you want. But here is the rate starts from 15 to 1. And people ready to lose a significant percent on the deal but to achieve dollars. You know what that mean.

Little exchanging kiosks on the streets are now openly violating the law making speculations of such sort: if you want to buy dollars, they will sell the currency by the overstated rate. If you don`t agree they will say they have no dollar.

kerbstone market in Ukraine

Such kerbstone markets are now operating on the streets, mostly at the crowded big markets. In Kharkov it is Barabashova, in Odessa – Privoz, in Kiev – Bessarabsky markets where you can buy and sell anything as there are a lot of people who operates with tons of cash every day.

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