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Hryvnia Rallies To 1-Month Highs After Ukraine Raises Benchmark Rate To 30%
Ukraine's infamous pink Porsche-driving central bank governor, Valeriya Gontareva, raised the nation's refinancing rate from 19.5% to a stunning 30% (effective Wednesday) in order to "stabilize the situation in the money and lending markets," and imposed some 'capital controls' on exporters holding foreign cash.
For now, the hink to the highest rate since 2000 is having a positive effect as UAH has rallied 2-3 handles back to one-month highs against the USD - having lost over 60% of its value in the last year (though we note these are the 'official' rates and may not represent actual UAH transactions in the real world). "The central bank is trying to send a strong signal that it is in charge," noted on analyst as the country desperately waits for its $17.5bn bailout from US taxpayers The IMF.
As Bloomberg reports, Ukraine's central bank is “eager” to strengthen the hryvnia toward the 21.7 per dollar average rate in the 2015 budget, which is important to ensure a board approval of the IMF loan next week...
Ukraine’s central bank raised its benchmark interest rate to the highest since 2000 as policy makers struggle to curb a decline in the nation’s currency and seek to move closer to obtaining an emergency loan.
The National Bank of Ukraine raised its refinancing rate to 30 percent from 19.5 percent, effective Wednesday, to “stabilize the situation on the money and lending markets,” Governor Valeriya Gontareva told reporters in Kiev. The regulator also retained a requirement for exporters to convert 75 percent of their foreign-currency revenue, helping the hryvnia strengthen 9.3 percent against the dollar.
Ukraine is working to access an International Monetary fund loan to avert default after the war with pro-Russian separatists in the country’s east helped wipe 15.2 percent off the economy last quarter compared with a year earlier. Authorities are also trying to prevent capital flight and stabilize the hryvnia, which has lost 60 percent against the dollar in the past year to become the world’s worst-performing currency.
“The rate hike will increase the appeal of holding hryvnias, so it will be a positive factor, but I’m not sure that it alone will be enough to fix a rather acute deficit of dollar supply,” Fyodor Bagnenko, a Kiev-based trader at Dragon Capital, said by e-mail. “What’s really needed in this situation is a combination of administrative and monetary measures -- and it seems like this is exactly what the central bank is doing.”
All laws demanded by the IMF for the approval of a four-year $17.5 billion loan program have been adopted by lawmakers, Gontareva said.
Ukraine’s First Deputy Finance Minister Ihor Umanskyi said Feb. 27 that IMF funds will go into reserves, because “it will be very difficult to douse the fire and panic without additional resources poured in.”
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So it would appear - by raising rates so dramatically, and choking off any hope of economic recovery - that the central bank is betting the netire nation's future on achieving the target FX rates that enable money to flow from The IMF...
Ironically, The IMF, at the same time, is drawing blood from Greece's stone (as it raids its pension funds to cover its debt).
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Ukraine credit risk remains the worst in the world...
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I'm in the National Guard......you're sending me where?
I'm suppose to guard....a pink Porsche?
Is there a list of countries that have NOT been bailed out?
North Korea?
You would be wrong .... they take any scrap offered .... Madeline "They tricked us !"Allbright's fuel rods .... to counterfeiting currency is a kind of self help bail out ?
Hmm I wonder what the Brookings Institute has to say because everything they write comes to pass verbatim
Don't forget to ask Dennis Rodman his take !
So, let me get this straight:
If I am willing to hold my bank deposits in these Ukrainian Hrrvvinrnias; I will earn 30% interest.
But these Hervenias are also losing 60% of their value at the same time.
So I only lose a net of 30% of my wealth by holding Hernias.
No thanks.
Now this is what I'm talking about. I want to see all the flippers, bucket shops, and land jockys, with their pants around their ankles, all of a sudden facing 30% rates. End game.
It doesn't matter if it where raised to 60%. the damage is already done on the street. ALL the store shelves are empty. for tea last month was 30-40 is now over 100 for same box if you can find any.
Ukraine's forex reserves are weak. So who paid for this massive intervention in favour of Hrvinia? EU, US or some special friends?
North Sentinel Island.
The North Sentinelese natives are so isolated and so xenophobic that nobody's ever managed to learn their language, much less trade with them, not even natives from other nearby islands. Their reaction to any uninvited guests from the outside world is to either flee into the bush or drive the outsiders away with arrows, depending on how brave they're feeling. Outsiders shipwrecked on the island or nearby reefs who are unable to escape capture by the islanders are always killed.
Needless to say, nobody's ever managed to lend the Sentinelese money, making bailouts unnecessary.
Look around,,, can you blame them?
If the 1000 men in the battalion being deployed to the Ukraine each carry $17.5 million we could save on delivery charges. Of course that may pose a problem since $1 million fits into a small suitcase.
http://n-auditor.com.ua/uk/novini/podiji/item/26038-%D0%BD%D0%B1%D1%83-%... - second biggest bank in UA (Delta Bank) is now bankrupt?
And now 3 banks are insolvent - Delta Bank, KredytpromBank and Omega Bank: http://en.interfax.com.ua/news/economic/253462.html
What exactly does it mean "a bank is bankrupt?". For all practical purposes, I assume that the owners of the mentioned banks are doing well as do some Oligarch-depositors related to these owners. All others are fucked.
I suppose in Ukraine terms "insolvency" or "bankrupcy" have different meanning than in western countries. The rule - "who's first takes all". Of course there're some guarantee funds for ensuring deposits, but only limited to specified amount (very low).
Plenty of pleople in western Ukraine and even people living in eastern one:
> are now in the army and cannot repay the loans
> are died now
> have run to Russia, Poland and other places where they can hide.
Another fact: decreasing value of hrivna - so people change their capital onto dollars/euros even russian rubbles.
So banks liquidity is so low - that we can assume: ukrainian banking sector is now non-existent anymore.
So the money flow is disturbed or stopped, companies cannot pay salaries or their duties (invoices, contract payments etc.). Domino's effect. Poverty and anarchy. So it's the matter of time that the situation will go worse there.
What's the latest on that "American" Ukrainian solder on youtube?
Dunno.....we got the gold.....that's all I care about.
>>> What's the latest on that "American" Ukrainian
MIA Ilovaisk. Months ago.
He is fricassee by now.
Somehow, hiking rates to 30% does not give me the impression that the bank is in charge.
AT what level UAH trades on the black market?
as of this afternoon it was 38-42 per 1$ in odessa.
Blame the Ukraine game .... probably the most invaded place on earth .... is like a Muslim blaming a white girl .... for inviting him to rape her !
What white girl ? You mind that kind of things ?
Some of them are really asking for it.
Oh BTW, you're just jealous that some Arab fuck your slutty daughter rightinthepussy with his larger dick (and while she is very happy about it).
Now I understand why there is always Ferrari and Maserati with Dubai matriculation going around in those big cities.
Do you know 50 shade of Grey ?
Mangina.
The probability that your name is Mohammad .... is about 50% .... right ?
No my name is Jewish origin (true) !
Stop it, you'll go blind.
In North America it's too early in the day for that shit anyway. Shouldn't you be at school by now?
Given that Arabs prefer boys (that's how Papillon escaped), you may have a point that the girls have to beg them.
I take down-votes as a good thing here, just proving that I have right, thanks, my little manginas.
Gunt(areva).
Rates going from 19% up to higher than credit card rates coupled with capital controls does a lot to instill confidence. I have some Benny bucks to throw away, how do I get a piece of that action?
You don't have to do a thing, the crisis (or default) will come to you in due time.
The US government is handling every one's
"investment",
so that
you can be sure to get a "piece of the action".
(one way or another)
Valeriya, darling. You don 't understand the gravity of the situation. This isn't a bog-standard currency crisis. Your bosses stupidly started a war with Russia, and they're losing. Why do you think even the IMF are dragging their feet on giving you money they know they'll never see again.
It's not a matter of if the Russian army will show up in Kiev, but when. And one of the first things they'll do when they get there is send you to Russia to stand trial for being an accessory to crimes against humanity, viz. the mass killings of Russians trapped in "Ukraine" when the Soviet Union collapsed and the banksters tore off chunks of the old Russian nation.
You like your pink Porsche that much? Because you won't like Siberia.
Do the right thing, by yourself if not Ukraine, Valeriya. Resign, and if there's anywhere else you can go, get out. Because the pink Porsche isn't worth what's waiting for you.
Life will go on. Surely even you can't screw up a job working the Yankee piano at an "European" supermarket in suburban Chicago? Won't pay for a Porsche but you'll sleep much better.
When the Ukrainians .... march into Moscow .... Valeriya, darling. will lead the parade .... in her pink Porsche .... that's a good one for Banzai !
I just liked "Yankee Piano". Green arrow.
Try the veal, it's excellent :)
It will be NATO army, who will show up in Kiev. Not the Russian.
Russia will be hapyy with the territories, like Odesa, Zaporozie Kherson Charkov.
Kan you please let me know, What should Russia do with lazy Waffen SS in Kiev and Lvov?
lol what "NATO army" ?
there ain't no such thing.
more like waffle ss
since belgium involved...
and can't make up their minds as plans falls apart
Waffe?
Waffen SS. Or maybe I slept last 57 years.
Maybe teyr betrayed me i the school.
Maybe all german Literature is here wrong.
"and choking off any hope of economic recovery"
Doesn't the shooting have to stop before you think about economic recovery? This is a central bank trying to save its own ass and to hell with what's going on in the economy.
Well, if she drive that poor pink Porsche like she drive the Ukrainian economy, I fear a lot for that same Porsche...
Women driving .... pink Porsches .... is a double threat ?
Yes, a threat that I'm too young to die. Thanks for worrying about my safety.
People fighting for sunflower oil in western Ukraine http://www.liveleak.com/view?i=259_1425391039
Cute.
Other countries in teh world in the 30% area:not a single one
Other countries in the 20% area: Belarus, Ghana and Malawi
Nice company.
Economist World Debt Comparison:
http://www.economist.com/content/global_debt_clock/
Please compare nations...US, Europes, vs BELARUS also Russian Federation
Belarus has tiny debt compared...
Lowered debts over 30% recent
better worry about your own country
what's the problem, any Ukie with money doesn't have it in UAH or in UE
So everyone is buying Ukrainian bonds then right? Right??
It doesn't matter what the exchange rate is, if you can't buy foreign currency.
It may be a good time to mention that the folks in Kiev are definitely working on reducing their expenses. I won't even mention that after Crimeans voted...even though Ukraine claimed that their people were being strong-armed and the agressor occupied Ukrainian land...Kiev tried to cut off phone service and electricity to "their people". Banks stopped servicing the region as well. I guess that's how the junta shows care. Lately, the reduction in expenditures come in the form of a full blockade of the self-proclaimed republics. Not sure if you guys heard...as there is a bit of of a black out on this info...but Kiev is not paying pensions to the people in the separatist regions. Those who are supported by social programs - families with a number of kids, veterans, the handicapped...they're not getting government pay anymore. People don't have electricity and gas was recently cut off...so now Russia is supplying it directly. It's interesting that Kiev claims that they're trying to liberate the people who are now forced to eat scraps being cooked on a fire in freezing temps because the liberators cut off pensions and heat.
When I visited Ukraine in 2003 and held a 1-hryvnia note in my hand, I laughed. Under the banner "National Bank of Ukraine", there was a pile of ruins! See for yourself:
http://en.wikipedia.org/wiki/File:1_Hryvnia_1995_back.jpg
One Hernia
30% that is a hike that seems for now to have had the desired effect. But, what we are looking at is a collapsed economy in the most corrupt nation on earth, outside of a few third world hell holes. With Western interests walking away for their Fracking Rigs, as the rebels recently showed they had captured. The farm lands the Western Corporations already own are not being plowed due to the civil war and unstable currency. The IMF balks at sending more money, as the 17.5 billion Euros is already gone, and Ukraine needs 50 billion more this summer, just to keep the state alive. The currency is going down the crapper because Ukraine has no economy, is totally corrupt, and is now America's proxy battlefield in an all out war against Russia. Under those circumstances, the Ukriane currency will be toilet paper as more hyper inflationary cycles resume.
The story is not over, it is only beginning. The West is sending Troops, Arms and billions of American Tax Dollars to raise a new army and by summer resume an offensive against the Donetsk and Luhansk republics. Perhaps even attacking Crimea, setting up a direct defensive response by Russian troops. Ukraine is fucked, for good, it will probably never reconstitute itself ever again in the same size and form of the former Ukrainian Soviet Socialist Republic. The Soviet Communists set Ukraine's borders not by economic or ethnic bordes, but by the needs of the communist party of the USSR. The end of the USSR should have been the end of artificial borders that gave Ukraine non Ukrainian nations. Like Crimea, Donbass and Galaicia.