A year after the beginning of the economic crisis in Ukraine devaluation pressure on the hryvnia is not reduced. Currency has a high demand among the population, which bought up more than $ 5.1 billion and led her out of the banking system, and therefore grivna continues to depreciate. Features of the National Bank to support the national currency decreased. Prevent the final disappointment in UAH can sharply reduce the use of currency in the country, experts say.

acquired

deficit

rapid devaluation of the hryvnia in late August and September, when the U.S. dollar in the interbank spot market, and Ukraine increased by almost 1 UAH /$ - up to 8,9-9 grn /$, has allowed economists to talk about the risks of recurrence in the foreign exchange market, last year's situation . From September to December 2008 the national currency has lost 60% of its value, falling from the level of UAH 5 /$ and the first response to the crisis. Ukrainian GDP since declining for three quarters.

Classical

cause devaluation of the hryvnia in the National Bank called a negative balance of trade and payments balances - the outflow of currency from the country does not stop. And despite a recovery in demand in the global market for steel products, which is one third of Ukrainian exports, and reduced domestic demand for imports, the trade balance of Ukraine in January-July, has remained scarce - $ 1.7 billion market and pressure on the hryvnia exchange rate was increased by 30 % of payments for imported gas.

But if last year the negative impact of a negative trade balance (- $ 8.9 billion in January-July), offset by the large inflow of investment ($ 6.9 billion), but this year is difficult to rely on currency income from this source - Received $ 2.4 billion of debt capital inflows also stopped - Ukrainian banks and companies back external loans by $ 5.6 billion more than attracted new ones. As a result, balance of payments deficit of $ 8.2 billion had to be met from reserves of the National Bank. During this period the central bank sold the currency on the market worth $ 7.4 billion In view of these interventions in August the figure had reached $ 8.3 billion

population takes all

low inflow of foreign exchange made a more serious problem of mistrust of the population to UAH. During the 7 months from the banking system spent $ 5.4 billion, while during the same period of 2008 - $ 4.8 billion Individuals removed hryvnia deposits and convert them into foreign currency for conservation savings account for the bankers. However, the total outflow hryvnia and foreign currency deposits of the population from January to July amounted to only 14.3 billion UAH ($ 1.8 billion). Given the data flow even in August declined - to 11.6 billion UAH.

large amount left from the banking system as the excess of purchase foreign currency on sales of $ 5.1 billion The population is buying dollars because they do not trust the UAH, - considers Advisor to the Chairman of the Board of Ukrgasbank Alexander Okhrimenko. According to President Viktor Yushchenko, the source of rush for the dollar is the excessive emission of hryvnia to finance the state budget deficit. In the form of advance tax payments (12 billion UAH), unrecovered VAT (14.7 billion UAH) and the sale of state bonds (30 billion UAH) in the economy, the government has sent nearly 57 billion UAH.

regulator actively suppressed appearing in banks hryvnia. In January-August money supply decreased by 45.3 billion UAH, and the amount of cash hryvnia - by 5.5 billion UAH, up 149.2 billion UAH. National Bank sterilized hryvnia, not only through the sale of foreign currency reserves at $ 8.3 billion, but also through fund-raising banks' certificates of deposit (the difference between the amount of the proceeds from the sale of the NBU and certificates issued by refinancing amounted to 6.3 billion UAH).

But only 10-15% of the $5.1 billion, bought by individuals, are the net demand of the population, the rest went into the shadow sector of the economy for cash payments. How many people in Ukraine, which have large amounts of operational hryvnia to buy U.S. dollars? - Said Alexander Okhrimenko .- The main currency went into a small business that used to pay cash. In times of crisis is increasing shadowing of the economy and increased demand for dollars shows that small business is reviving. The volume of deposits of legal entities by September 1, decreased by 18.6% or 26.4 billion UAH.

Case for National Bank

exporters, which could support the hryvnia, refused to sell the currency because of the unwillingness to bear exchange losses from a possible further devaluation of the hryvnia. Head of NBU Volodymyr Stelmakh calculated that the holdings of the Ukrainian companies abroad amount to $ 5 billion, an increase from the beginning of the year at $ 2 billion in such a situation, the only structure capable of selling the currency to meet demand, is the National Bank, whose primary function - to ensure stability of the hryvnia. The boards always sound different proposals - the intention to settle any demand now, to stop falling hryvnia to distancing from the market to see how far he drops a course and then decide how to align, - says a source in NBU .

It is to improve the capacity of the NBU's balance of payments support to the International Monetary Fund has begun cooperation with Ukraine and on stand-by program has listed $ 10.6 billion, however, of which only $ 5.8 billion received by the regulator for foreign exchange intervention. At the same time getting the money was accompanied by restrictions. From the regulator required to allow the hryvnia exchange rate adjusted according to market rules. We were told to leave the market, we have left, - said the Deputy Chairman of the NBU Alexander Savchenko.

Under the terms of the memorandum with the IMF, National Bank of Ukraine is obliged at each reporting date to hold a certain amount of net reserves (excluding trenches Fund). By the end of III quarter net reserves should reach $ 16.6 billion, but by 2 September, they have been less (gross reserves of the NBU totaled $ 28.8 billion). This is due to the fact that 25 and 27 August, the NBU to reduce the rush on the cash market has sold $ 262 million at the rate of 8 grn /$. This amount was not enough to stop the growth rate.

Yesterday, Mr. Stelmach said he intends to spend on intervention in September to $ 1 billion
But in a significant reduction in the course has not even believe in the government, which had previously stated that the actual sound hryvnia rate - 6,5 UAH /$. It was announced that next year the state budget revenues are recorded based on the course 8,5-8,6 grn /$. For the current year was 7.1 UAH /$,- said Stelmach.

ban currencies

experts offer different solutions to the problem of the devaluation of the hryvnia. President Viktor Yushchenko, in particular, urges politicians who do not have economic education, declined to comment and exchange rate forecasts. Fever Pitch illiterate population creates interference in the National Bank of politicians, ranging from the Prime Minister, who consider it necessary to do regular daily commentary on the course - said last week Yushchenko. Treasurers joke that the next day after each prediction Yulia Tymoshenko they are preparing for another jump in the dollar.

Most bankers believe that the situation may be corrected by compulsory sale of foreign exchange earnings by exporters and reduce the time for its implementation at least 90 days. This rule was present in the draft law #3585, but was removed from it before the vote. The National Bank suspect that if we make the company sell the currency, they will try not to pursue the proceeds to the country as long as possible, turning it into offshore companies. Therefore, the regulator has developed a plan to rid the Ukraine of dollar dependence. National Bank is developing new tools to reduce this dependence, namely: the prohibition of foreign exchange loans to individuals and entrepreneurs who do not have foreign exchange earnings, that any conflict in the case of devaluation or termination of foreign exchange earnings.

also planned to carry out payments on foreign currency loans in national currency by mutual agreement between banks and customers to ensure that there is no currency risk, - said the director of the Department of Foreign Economic Relations National Bank of Ukraine Sergey Kruglik.

Bankers agree that the term should be eliminated from the exchange relations in favor of national monetary unit, but are confident that this reform is not possible in anticipation of the election campaign. The main problem is disunity authorities, pursuing their own interests and their actions provoke distrust hryvnia. Only in our country all the people endlessly playing roulette currency: today bought - sold tomorrow. Most suffer losses and are indignant because of this - and noted. About. Chairman of the Board INDEXBANK Eugene Chemerys .- If we do not put an end to this ugliness, we will never emerge from the crisis. Steps must be visible and tough. But they must be consistent. You must create a clock mechanism, which is very clearly play between banks, National Bank, the Government and the tax administration.

Valery Geyets, director of the Institute of Economics
and prediction of NASU

appeals not to panic cause a backlash

- What is the hryvnia exchange rate objective, based on current and forecasted rates of payments and trade balance?

- The situation in the Ukrainian and world economy, shows that the movement of the hryvnia towards 8,5-9 grn /$ corresponds to the objective state of affairs in the economy. This level is desirable to maintain, as was outlined in the revival of the global economy can maintain the price competitiveness of exports - and our economy can begin recovery. Because the banking system a serious crisis, thank God, not systemic, the economy and lending by banks is very limited, the export-oriented scenario for us, yet inevitable.

- ie 9 UAH /$ is NBU for the psychological mark, above which the rate should not rise, and to prevent this, he will use all its resources?

- Before the National Bank faces the task of preventing further collapse. Because it will cause deep systemic crisis.

- But the NBU has already exceeded allowable in a memorandum with the IMF, the size of interventions to support the course?

- National Bank, if necessary, should go to the violation of the requirements of the IMF to conserve foreign exchange resources and to pay the demand by implementing exchange controls in all directions. We can not allow some of the money went back to the currency market. In the present circumstances it will be the general line.

- Do you think that the devaluation in favor of exporters will not be a problem for the Ukrainian banks?

- For banks, of course, a high rate would be a problem. Therefore, the process of mergers and acquisitions in the banking sector will accelerate, leading to a healthier banking system.

- Council of the National Bank at the next meeting on September 10 recommends that the NBU Board to violate norms of the IMF?

- At present the council and representatives of the government. If they see that a reduction in reserveswill be followed by other systemic measures to stabilize the NBU rate, the council will make such a recommendation. But I have a suspicion that the IMF may delay tranche before the end of the year.

- the timing of the National Bank planned to reduce the dollarization of the economy?

- If they do not hold, the country loses its most important component of national security - control of money circulation. But it is impossible to think that by administrative means can increase confidence in the economy. First we must reject the political cycle in economic policy. This is still unrealistic in the upcoming elections.

- What proportion of the demand for cash dollars accounts for the shadow economy?

- In my opinion, the needs of this market - no more than $ 2.3 billion (per month). Naturally, the demand for currency from importers too big - and it fuels the course.

- Why Retention National Bank of UAH 4.4 billion of reserves banks have not reduced the demand for the dollar?

- Because 150 billion UAH are in the hands of the population, and this vast sum can put pressure on the course.

- How to reduce the amount hryvnia out banks? - During a crisis, it is almost impossible to do. Need to improve confidence in the hryvnia, which need open policy authorities. Appeals not to panic cause a backlash. The population needs to see what happens.

Vladimir Khlyvnyuk chairman of Bank Finance and Credit

For the population of the dollar - it is also good

- How did the devaluation of the hryvnia for your clients this year?

- At the current appreciation of the levy and other factors. With the end of summer - preparing for school, institution, harvesting vegetables and fruit - in August, twice the amount of repayment of loans decreased physical persons as compared with previous months. The tendency to reduce the flow of deposits and slowing activity related to the repayment of loans in August, is repeated from year to year.

- You can predict what will be the further weakening of the hryvnia?

- Further devaluation of the hryvnia will be critical for borrowers. According to our research, those who now pay almost all their wages are sent to repayment of loans. Previously, when deciding whether to grant credit was taken into account that the payment on the loan may not exceed 60% of the client. And given the fact that the course has grown by 40%, further improvement unambiguously lead to a sharp deceleration of redemption.

- In your opinion, why was devalued?

- Perhaps we underestimated, that for the population of the dollar - is also good. And as in times of crisis among the population at the hands of the hryvnia had collected a very large mass, the demand for this scarce commodity increased dramatically.

- how much influence rush for exchange rate fluctuations?

- Demand from the population is very large. Over the past two weeks we sold our population four times greater currency than in the first half of August.

- What measures can bring down the excitement?

- now - only administrative, after the crisis should go to the market. We could avoid unpopular administrative steps if it had banned foreign currency lending - even when the dollar was 5,05 UAH /$.

- How does the bank will behave after the introduction of the NBU obligation to pay interest on foreign currency deposits to customers in UAH?

- The first time we areready to compensate for our inconvenience to depositors by selling the currency to the amount of interest on some preferential acceptable to their course. But gradually, this problem will disappear, because it is purely psychological and there is no economic reason not to pay interest in UAH. Although the body of the deposit, of course, need to maintain the currency, brought by the client.

- Is it possible that the next step NBU translates foreign currency deposits in UAH?

- It is impossible to 100%. This assumption is unfounded, but it speculates yellow press.

- How do you feel while maintaining the instability of the Ukrainian economy and banks' loss of their owners will be bankrupt their institutions?

- The shareholders of banks is not possible in a civilized way to leave the market. Each current shareholder of the Ukrainian bank is sure that his institution will stand. Those who are in this he was not sure, have driven their banks into bankruptcy. There remained those who are able to deal with the situation. If there are no serious hazards, the stabilization of the banking system will occur in March next year, after the election. It remains to hold the entire six months.

Ruslan Black

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