Financial
Safety
Ukraine in
‘full-blown financial crisis’ – National Bank head
Published time:
December 30, 2014 14:46
Valeria Gontareva,
the head of Ukraine's Central Bank, attends a news conference in Kiev December
30, 2014 (Reuters / Konstantin Grishin)
Ukraine’s GDP shrank by 7.5 percent from
January till November 2014, as foreign exchange reserves fell to their lowest
level since 2009, and inflation jumped to 21 percent by November, admits the
head of the Ukraine’s National Bank, Valeriya Gontareva.
The country’s foreign
exchange reserves shrank to $9.9 billion, as Kiev gave Naftogaz an estimated
$8.6 billion to buy gas and settle state guaranteed Eurobonds. $3.1 billion
went to settle the debt with Russia’s Gazprom,
Gontareva explained.
The conflict over Russia’s reunification
with Crimea has killed more than 4,700 people has also killed the economy.
“There is a full-blown
financial crisis,” Gontareva told reporters Tuesday. “We
can only overcome it if we implement quick and even extreme reforms.”
Ukraine’s national
currency, the hryvnia, has lost half of its value by November.
“…. There’s almost 100
percent devaluation in the country. From the economic territory, it’s called a
50 percent devaluation,” Gontareva said.
She said it is impossible to keep the
hryvnia stable.
“This is simply an
unrealistic task, because it’s not fixed in any constitution.”
Earlier in the week,
after the unprecedented 10–hour session the Ukrainian parliament adopted the
2015 budget that sees a number of drastic cuts and import duty raised to 10
percent, which should give way to new IMF funds. The last IMF estimate showed
that Ukraine needs another $15 billion, on top of the $17 billion the Fund had
already agreed to allocate.
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