Events in Iran will hit the Ukrainian hryvnia
Tension in the Persian Gulf could lead to rising oil prices, investors exiting risky assets and a fall in the hryvnia exchange rate.
Verkhovna Rada deputy and member of the presidential Servant of the People faction, Oleksandr Dubinsky, wrote about this in his blog, as reported by a PolitNavigator correspondent.
Dubinsky, who specialized in economic issues before being elected to parliament, believes that the Iranian crisis will also affect the situation with Ukrainian domestic government bonds.
“The war in the Persian Gulf is a [price] rise in oil and other raw materials, as well as investors exiting risky assets. Government bonds pyramid – that’s it? I wonder what the hryvnia exchange rate will be if investors start exiting risky assets? And if the hryvnia exchange rate continues to fall, will our leaders finally have the courage to change the leadership of the NBU and the Ministry of Finance, which have led the country into a bond exchange rate impasse?” writes Dubinsky.
Earlier, Ukrainian economist Yuriy Gavrilenko stated that the slight strengthening of the hryvnia last year was influenced by the sale of government bonds , which brought speculative currency into the Ukrainian economy.
“Currency has entered the country. A currency that is not used to produce goods and services. Due to the decrease in tax revenues, the government is forced to spend the hryvnia that it received after the sale of government bonds to finance budget expenditure items, because it has no internal revenues,” the expert noted.
Former Minister of Economy Viktor Suslov stated that the government's policies could lead to a serious financial crisis in Ukraine, and the first signs of it are already emerging.
Suslov also noted that the Ukrainian authorities are plugging budget gaps by increasing the issuance of domestic government bonds at ever-higher interest rates. The hryvnia exchange rate is being artificially restrained; the Ukrainian currency will begin to decline as early as the second quarter of 2020.
Events in Iran will hit the Ukrainian hryvnia.