Ukraine's economy shrank by 18% in the second quarter and NBU adviser, Valeriy Lytvytsky, forecasts a 10% contraction, a slightly better forecast than the IMF and World Bank forecasts.
Bad economic news, but the Government and President are both complaining about the hryvnia's recent drop. Even though the economic situation is still grim, the president doesn't think there is a reason why the hryvnia should be dropping.
"There are currently no factors that may have a negative effect on the stability of the hryvnia exchange rate, apart from the one - an uncontrollable budget deficit. But this question can be easily resolved - either with the participation of the National Bank or without it, and through the support of a weak or strict budget policy in Ukraine," he said at a meeting with National Bank of Ukraine (NBU) Governor Volodymyr Stelmakh on Tuesday. Yuschenko expressed concern that the NBU was the only customer of sovereign bonds and that UAH 36 billion had been spent for this goal.
"Your task is stable money. This is the only mission of the National Bank. There are no factors in Ukraine influencing the hryvnia's stability," he said.
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