the-expert-assessed-the-real-inflation-rate-and-the-situation-with-the-hryvnia-depreciation

The expert assessed the real inflation rate and the situation with the hryvnia depreciation

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Real inflation is at 30%. This opinion was expressed by economic expert Yuriy Havrylechko in a commentary to UNN. The expert emphasized that the depreciation of the hryvnia is an absolutely natural process in our conditions, as Ukraine has a fantastic amount of expenditures that are not covered by anything.

 First of all, because of the activities of the NBU, which allows our banking system to earn as much during the war as it did not earn even during the credit boom of 5-7 years. I don't know how Ukraine can guarantee banks a 23-25% profit on NBU deposit certificates during the war. This takes more than UAH 100 billion every year. How? Well, besides the fact that the money is tied up - about half a trillion, which does not work in the economy. When money doesn't work in the economy, the only way for any business to compensate for the lack of lending is to raise prices. That's why there is another big lie from the State Statistics Service about inflation at 5% per annum. Everyone can see for themselves that real inflation is 30%. And just at the end of the year, this situation was illustrated in the hryvnia-dollar exchange rate

- the expert explained.

He noted that a few years ago, it was traditional for the hryvnia to strengthen against the dollar during the New Year holidays, as Ukrainians handed over a lot of foreign currency. But now the population's reserves have already been exhausted - there is nothing to give.

"At the same time, I would like to remind you that we still have a lot of funds, relatively a lot, in the NBU's foreign exchange reserves, and the only interesting thing is that they are not in dollars or euros, but mainly in securities. It is quite a specific situation that Ukraine is growing its foreign exchange reserves while the hryvnia is devaluing. In addition, let us recall the situation with the grain corridor and the physical withdrawal of millions of tons of grain from Ukraine. According to our officials, the money for the grain sold has not returned to Ukraine. That is, foreign exchange earnings in the amount of USD 8-10 billion remained abroad. Did this affect the hryvnia exchange rate? Absolutely. Will this money appear in Ukraine soon? I think not. Why should it appear? The grain has been exported and sold. That's it," Mr. Havrylechko said.

Курс може не бути стабільним, але Нацбанк згладить небезпечні коливання – голова НБУ07.01.24, 15:30

 According to the expert, further weakening of the hryvnia against foreign currencies is possible.

"By the way, strange as it may seem, the blocking of the Polish border has helped stabilize the exchange rate to some extent. Because when you can't import anything in particular, you don't spend the currency and it stays in the country. And since we import much more than we export... this blockade of the border, again, strange as it may seem, has contributed to the fact that our devaluation has grown very slowly.  So to say what will happen next... it depends not only on monetary policy. This is a rather complicated issue that also depends on how the NBU will continue to behave, what the government and parliament will do... which, by the way, after returning all pre-war taxes and the scope of inspections. Maybe it will introduce some new taxes. Because any new tax means further devaluation of the hryvnia. The situation with the fate of the so-called draft law on the so-called mobilization is unclear, because it has nothing to do with mobilization, but the blocking of accounts, or rather the announcement of it, has already led to people pulling their savings out of the banking system. Accordingly, the less funds the banking system has, the less opportunities it has to start lending, even if the banking system wants to start lending. There is no economic sense for banks to lend to businesses. That is, if you can raise funds from the public at 10-12%, at 16% in the most fantastic scenario, and invest in NBU certificates of deposit at 23-25%... why would you want to lend to a business if you are guaranteed to earn 10-12% per annum? It makes sense. So this is the situation with the exchange rate. The only thing that can save the exchange rate is further financial and credit injections from the West," Havrylechko summarized.

Recall

Olena Sosedka, co-founder of Ukraine's first fintech ecosystem Concord Fintech Solutions, predicted that the US dollar could reach 42 UAH in the spring

Lilia Podolyak

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