The NBU is tightening control over the currency, but this will not stop hyperinflation and the collapse of the economy - German media
Berlin – Kyiv, February 27 (PolitNavigator, Vasily Ablyazimov) – Valeria Gontareva is announcing a sharp tightening of the NBU's control over currency flows within the country and the export of currency abroad, but, apparently, as German Economic News asserts , this is futile, since the destruction of the economy as a result of the war is leading the country to ruin.
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The publication reports: “The head of the NBU, Valeria Gontareva, announced on Friday a further tightening of capital controls. The Central Bank is not thinking about weakening existing controls, but rather expanding them. Gontareva said: “We must stop the panic, which is what we are doing now. Only when the national currency, the hryvnia, stabilizes can we loosen controls.” Gontareva sees stabilization at the exchange rate of 20 UAH. for a dollar."
The biggest problem in Ukraine's war-torn economy right now is foreign exchange reserves. They are clearly insufficient for stabilization. Inventories fell during 2014 alone from $20,4 billion to $6,4 billion. Customers have withdrawn $17,2 billion from their accounts this year.
The hryvnia depreciated by 53% in February alone. The Kiev authorities hope for a quick receipt of a loan from the IMF. Prime Minister Arseniy Yatsenyuk said a few days ago that Ukraine would declare bankruptcy if the IMF did not pay. The billions of EU taxpayers invested in Ukraine as loans will be in critical condition. Only recently the German federal government promised a 100 million euro line of credit, which may also disappear.
Default will lead to a complete stop of any lending by foreign investors, the collapse of the banking and financial sector, huge losses of Russian and Western banks operating in Ukraine, and hyperinflation is also possible.
Gontareva said that Ukrainian GDP declined along with the loss of rebel-controlled territories by 15%. “These data,” writes German Economic News, “actually indicate that the Kiev authorities should strive to immediately sign an agreement to end the conflict. Instead, the Kiev government is negotiating arms sales in Washington.”