Ukraine’s sliding currency | beyondbrics:
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How long can Kiev hold the hryvna? As fastFT reports, the currency has edged down for nine straight days to 8.37 to the US dollar, its weakest since September 2009.
It looks like a managed devaluation, of sorts. The exchange rate is controlled by the central bank so its slide shouldn’t be seen as a direct reaction to the turmoil on Kiev’s streets. But monetary policy can be almost as haphazard as the government’s reaction to opposition protesters.
The government may well be giving into pressure for a weaker hryvna from big business. Competing currencies in the region such as the Russian rouble and the Turkish lira are weakening, and Ukraine’s exporters are hurting.
“They know the hryvna has to be weaker,” says Timothy Ash of Standard Bank. “They would probably like 8.60 or 8.70 by the end of the year but they don’t want to do anything extreme while there is pressure from the streets.”"
'via Blog this'
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| Source: Thomson Reuters |
It looks like a managed devaluation, of sorts. The exchange rate is controlled by the central bank so its slide shouldn’t be seen as a direct reaction to the turmoil on Kiev’s streets. But monetary policy can be almost as haphazard as the government’s reaction to opposition protesters.
The government may well be giving into pressure for a weaker hryvna from big business. Competing currencies in the region such as the Russian rouble and the Turkish lira are weakening, and Ukraine’s exporters are hurting.
“They know the hryvna has to be weaker,” says Timothy Ash of Standard Bank. “They would probably like 8.60 or 8.70 by the end of the year but they don’t want to do anything extreme while there is pressure from the streets.”"
'via Blog this'
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