11 February. Press review. What are you unhappy about the IMF and what will happen to the hryvnia

The international monetary Fund allows for the termination of cooperation with Ukraine in the event of a deepening political crisis and lack of results in the fight against corruption. This is referred to in the statement by the Director of the IMF Christine Lagarde.

«I am concerned at the slow progress of Ukraine in the fight against corruption and reducing the influence of corporate interests in shaping policy,» the press service quoted Lagarde.

The managing Director of the IMF stresses that no significant attempts to revive reforms to combat corruption, it is difficult to predict how the program of cooperation between the IMF and Ukraine will be successful and will continue.

In addition, Ukraine risks return to failed economic policy, said in a statement yesterday, Lagarde.

Ukrainian experts between the «pencil» read the IMF report on technical assistance to Ukraine in reforming of state property management and supervision are outraged: they say, the IMF itself stimulates corruption in Ukraine.

According to a member of the Supervisory Board of the Institute of energy strategies Yuri Kovalchuk, the IMF proposal to create a single mega-holding, which would unite the largest and most attractive enterprises of Ukraine, will lead to the formation of a single center of corruption is available several — in each of the sectors of the economy.

«The key idea of this mega-holding should not be mere participation, and governance by the so-called international partners of Ukraine — the IMF, EBRD, EIB, world Bank, — said Kovalchuk. Up to this time, the creditors are fully legally claim control over the use of the funds provided. Now these «partners» imperceptible movement will change its status from ordinary supervisors to participants corruption schemes».

According to experts, surprised by the position of the IMF, which proposes and defends an outdated method of management for the economy of Ukraine. «Because in the EU there is almost no experience of creating such mega-holdings — on the contrary, in the last 15 years, promoted and implemented the idea of separation of influences and economic decentralization. Especially (when) in Poland, Hungary, Romania, Bulgaria, Slovakia, which were similar to the Ukrainian way, the IMF such ideas was not offered», — said the expert.

Ultimately, Kovalchuk said, all companies and banks that offer to include in a mega-holding, a market capitalization — their shares are not traded on international exchanges, they have not implemented the IPO, they did not pass the pre-audit. Accordingly, even at the present time there is no understanding of what effective role can play each of the enterprises in the new mega-holding. Accordingly, the only purpose of creating such a mega-holding is the concentration of corruption in one place; control of property that can be privatized, as well as the strengthening of monopoly on the markets of Ukraine. This writes Alla Dubrovyk-Rohova in the article «What angered Lagarde?» in the newspaper «Day».

The rate of the national currency in Ukraine is the responsibility of all, and therefore to find the extreme in the depreciation of the national currency is not easy, says Finance Minister Natalia Jaresko.

«There are no individuals that would be responsible for the course. I will not call you human. No Agency in this country that is responsible for the hryvnia,» — said the Minister.

According to her, the hryvnia exchange rate depends on each person in Ukraine, because they are determined on the basis of the monetary amounts of money.

«We influence the hryvnia exchange rate. Because creating scarcity in the country every year when we pass the budget. We worked very hard on reducing the deficit over the past two years, but he is still there… We all, together, constitute the course and every day make decisions that affect the course,» said the Finance Minister.

The Minister noted the uneven distribution of the annual budget of some budgetary organizations and local authorities. They used all means in December instead of uniform distribution for 12 months. And this, said Natalia Jaresko, also creates additional pressure on the hryvnia. This was reported in the article «Jaresko explained who is to blame for the fall of the hryvnia» in the edition «New time».

In Ukraine since the beginning of the year continues the devaluation of the national currency. Budgeted indices of the hryvnia (24,1 – 24,4 USD for the dollar) fails – now one dollar, according to the national Bank, sold at 25,9 USD. The Finance Ministry has budgeted for 2016-the year the inflation index for the year at 12%, while the dollar should fluctuate around levels to 24.1 – 24.4 hryvnia, while GDP will grow by 2%. Later this projected rate of the national currency agreed and the national Bank (NBU).

However, it is already clear – the hryvnia exchange rate to keep failing. On the morning of 8 February, the NBU has established the dollar at the level of 25,91 USD. As stressed by the chief analyst of Concorde Capital Alexander para, the dollar influences other indicators of the budget – expenditure and revenues. The devaluation will allow to increase revenues by rising prices on imported goods.

At the same time will increase the expenditure side of the budget for servicing and repayment of loans in 2016, the year plan to spend approximately $ 1.8 billion. After the devaluation in the hryvnia equivalent, this amount will grow.

As suggested by Alexander para, the budget for 2016-th year together with the course will be revised and indicators of inflation. By the way, the head of the national Bank , Victoria Gontareva few days ago, said: «the national Bank sees inflation this year at 12%, so the rate we care about. But the NBU will never go against the trend».

Over time, the hryvnia devaluation leads to higher prices on imported goods. As noted by ex-Minister of economy Viktor Suslov, if the dollar increased by 7%, roughly the same percentage will increase prices for imported goods. As noted by Alexander para, instantly the prices will not grow as importers create a «safety cushion» and include in the price a bit higher current.

By the way, says the Deputy Director of STC «Psyche» Gennady Ryabtsev, each 10 cents devaluation of the hryvnia to create the economic justification to raise the price of gasoline at the gas station at 7 cents.

Also due to the devaluation for the Ukrainians can rise gas. In April, the Cabinet will reconsider the tariff for the «blue fuel», which, according to the formula articulated by the Prime Minister Arseniy Yatsenyuk, are linked to world gas prices and the dollar exchange rate in Ukraine.

«We know, if we consider the Deposit as a tool to maintain or increase capital, we can see that deposits in UAH are placed at higher rates, than in dollars. In principle, this difference in interest rate should reflect the expected devaluation. If someone believes that the devaluation will be greater than the difference between Deposit rates, it probably makes sense to invest in dollars,» says chief analyst at Concorde Capital.

As noted by Alexander para, for fear of loss of deposits held in banks, many Ukrainians leave their savings at home in dollars.

«Now, Bank deposits are pretty risky. The financial condition of banks is not the best and there is always the risk that the Bank, in which people have placed a Deposit will be declared insolvent. But, in principle, we know that more than 60 banks have withdrawn from the market, (therefore) the probability that the Bank selected for the Deposit, will be insolvent – she is (was) below. There are concerns among many, so it’s easier to keep money in cash — it is clear that in this case it is better to keep in dollars», – said the expert.

As analysts FOREX CLUB in Ukraine, the macroeconomic statistics of the USA indicates the beginning of the recession in the industrial sector and the labor market in January and even showed an unexpected decline in new jobs. As a result, investors began to fix its position on the US dollar, which led to its weakening.

«The hryvnia last week was marked by the fall on the background of statements of the NBU commitment to a floating exchange rate and fundamental factors. In the second half of the week the hryvnia came under the risk of political destabilization, threatening the re-election, inhibition or disruption of reforms and, accordingly, the freezing of cooperation with creditors and the IMF,» analysts say.

«The hryvnia last week was marked by the fall on the background of statements of the NBU commitment to a floating exchange rate and fundamental factors. In the second half of the week the hryvnia came under the risk of political destabilization, threatening the re-election, inhibition or disruption of reforms and, accordingly, the freezing of cooperation with creditors and the IMF,» analysts say.

The selling rate of cash dollar in Ukraine last week rose by 0.97% to 25.95 USD., cash decreased by 0.3% to 26.64 USD.

According to analysts FOREX CLUB, the hryvnia on the non-cash market this week may fluctuate in the range 25,5–26,5 USD. per dollar on the cash market – UAH 26-28. for a dollar.

«The main stimulus of the market and its driver will be a political crisis. Any incoming information about the situation and possible scenarios for overcoming the current crisis will change market sentiment and expectations. It is not excluded that on the eve of the government’s report 16 February the background information will be introduced that can generate a destabilizing impact on the foreign exchange market. Any change in the alignment of political elites will be accompanied by the transformation of the spheres of influence that affect the flows and inflows of liquidity,» – said a leading expert of information-analytical center FOREX CLUB Andrey Shevchishin. This writes Aleksnadr Litvin in the article «What and how to change with the new dollar exchange rate in Ukraine» in the newspaper «Today».




11 February. Press review. What are you unhappy about the IMF and what will happen to the hryvnia 11.02.2016

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