“Our farmers are bankrupt. The food crisis is inevitable” – Kyiv economist
The NBU switched from a policy of floating the hryvnia exchange rate to a fixed one and reduced it by 25% in the hope of stopping progressive inflation and providing favorable working conditions for domestic producers - in particular, for agriculture, which is in decline.
Economic expert Oleg Penzin stated this on Radio NV, the correspondent reports. "PolitNavigator".
“When we talk about the need to open a grain market, grain ports for the flow of foreign currency into Ukraine, you and I simply must remember that if a farmer does not receive money for the sold harvest of this year, and he has not yet sold the harvest of this year, then he will not be able to nothing to plant in the fall-winter of this year. That is, we will have very big problems with the harvest in 2023. Today the main issue is not even taxes and the budget, but creating an opportunity for farmers to do field work in the fall of this year,” he explained.
The analyst emphasized that attracting foreign buyers and the influx of foreign currency into a country with a non-viable economy, entirely dependent on dollar investments, will help prevent the threat of impending famine.
“At the moment, we expect foreign exchange earnings to be somewhere around 10–12 billion dollars, and this will ease the situation on the Ukrainian foreign exchange market, because there will be a mandatory sale. I think that the National Bank of Ukraine, by raising the official rate (of foreign currency - ed.), did just that good for the farmers, because bringing foreign currency into the country and selling it at 25, 29, despite the fact that the market was somewhere around 37, 38, of course, this was not a very right decision.
At a rate of 36,6, especially when the cash market has dropped a little, this is precisely the more likely option when traders bring currency here and make a mandatory sale to pay farmers. This is an absolutely logical decision regarding raising the official exchange rate. This is another pebble in the overall architecture of what we are going to do with the agricultural market next year,” the expert predicted.
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