Who is to Blame for the Devaluation of the Hryvnia?

The answer to this question is the leadership of the National Bank of Ukraine and the Ministry of Finance of Ukraine. And the major reason for the depreciation of hryvnia is that these two institutions were not working and are not working together simultaneously and consistently. The Ministry of Finance of Ukraine performs its task, urging people not to panic, refers to military action, but specifically does nothing to stabilize the financial situation.

At first the Chairman of the National Bank of Ukraine from the rostrum of the Verkhovna Rada of Ukraine promises exchange rate UAH 12.9 / USD 1, which is impossible to keep, then considers it appropriate to impose a method of determining of a floating exchange rate, which is indicative for countries with a stable economy, on the Ukrainian banking soil, which as of today is absolutely not prepared for such an approach, then promises the free sale to the people about $ 200 a day per person, but even she is not able to buy them in the market, and then even more interesting: the National Bank of Ukraine promises for the stabilization of the situation further to "tighten nuts” by administrative methods, but there is such impression that the National Bank of Ukraine does not understand what it can derail the thread, and the nuts just can took off, causing the significant harm to Ukraine's financial system.

It is possible still infinitely long to enumerate illogical and ineffective actions the National Bank of Ukraine and the Ministry of Finance of Ukraine that are particularly harmful for the situation in today's challenging financial market of Ukraine, but now the constructive is more than ever necessary.

In my opinion, the President of Ukraine and the Prime Minister of Ukraine should stop to find out whose political force has a higher rating because today inaction or semblance of activities is a direct path to the final destruction of as it is weak financial stability, besides, it is a crime in relation to the people of Ukraine, who not only loses daily on the devaluation of hryvnia, but in fact lost all understanding of financial policy carried out by our public officials.

Very difficult situation which has emerged in Ukraine, including the financial market requires immediate action, but it is still under control and not hopeless. Firstly, the National Bank of Ukraine and the Ministry of Finance of Ukraine should immediately come up with the united strategy of finance market and start working synchronously; secondly, they should recognize that now it is not the time for the introduction of a floating exchange rate and after bringing arguments to the IMF should switch to a fixed rate with additional administrative restrictions (but with clear and specific directions) until the cessation of hostilities in the east and the clear determination of the policy for building further relations with the Russian Federation.

At floating exchange rate the National Bank of Ukraine spends gold and foreign currency reserves, which are mainly directed to speculation in the foreign exchange market that adds no stability to the financial market of Ukraine and depletes it. It is clear that in order to support a fixed rate the National Bank of Ukraine will also bound to spend reserves, but it will not last forever, and the effect of this step should be enormous, because the people and businesses finally will get the confidence in the future and financial benchmarks that will quench panic and can create some stability in the stormy financial market. In this transitional time it is necessary to model the definition of a floating exchange rate, which would be natural for the Ukrainian banking system, and check it in test mode, without creating additional stresses for the country and its people.

http://www.companion.ua/articles/content?id=292489