OPPOSITION PLATFORM – FOR LIFE MP Serhiy Lovochkin commented on economic situation caused by the hryvnia devaluation.
“The depreciation of the national currency is in full swing. The official USD to UAH exchange rate dropped by 1.78 hryvnia or by 6.7 percent of its value. The cash market is in panic: the U.S. dollar is traded at 29 hryvnia, which means the hryvnia devaluated by over 10 percent. At the same time, the National Bank spent $1.3 billion or 5 percent of gold reserves as of early March on foreign exchange interventions to smooth out fluctuations on the interbank market. At this rate, it’s a matter of time before we get an uncontrolled collapse in the foreign exchange market that will trigger both debt and banking crises,” the politician said.
He explained that the devaluation of the hryvnia began as a reaction to a small outflow of capital of non-residents from the domestic government loans market, continued due to the collapse of oil and panic in global financial markets (over the past three weeks, European and American stock markets have lost 25–35 percent) and is now increasing amid blurred reaction of the economic and monetary blocs of the government to the unfolding global financial crisis.
“Instead of listening to the government’s assurances that Ukraine’s economy is better prepared to the crisis than it was in 2008 or 2014, the business, investors, and the people want to hear a concrete plan of anti-crisis measures aimed at supporting the financial system, the exporters, the manufacturing industry, transport, small businesses, and the population. The lack of plan and regular communications by the government and the National Bank of Ukraine just adds up to uncertainty, increases the outflow of capital, and discredits the hryvnia,” the MP said.
The politician reminded that the OPPOSITION PLATFORM – FOR LIFE has developed a package of anti-crisis measures aimed at stabilization of economy.
“Instead of the land or labor reforms, the authorities must take immediate measures on containing the economic crisis, propose the plan for social protection of citizens under quarantine, introduce relevant amendments to the budget, work on the state debt restructuring and support of the banking sector. Unlike the land reform, these issues do unite the parliament and the people in the face of the upcoming epidemic and crisis,” Lovochkin summed up.Follow @serhiylovochkin