Ukraine Currency Crashes To Record Low As IMF Blasts ‘Gross Abuses’

Ukraine Currency Crashes To Record Low As IMF Blasts “Gross Abuses”(ZeroHedge, Sep 16, 2014):

Despite celebrations of de-escalations and truce in US equity markets (by asset-gathering commission-takers), the situation continues to go from bad to worse in the nation almost forgotten now that ISIS is stealing American headlines. The Hryvnia plunged 7.5% this morning – its biggest single-day drop on record – following the release of a scathing IMF letter and devaluation warnings from BofA. The IMF blasted Ukraine’s “premature emission of extra money,” and demanded it “immediately halt these gross abuses,” as BofA warns of risk of “10-20% devaluation” in the next year is high given reserves are at a “critical level.”

UAH plunges 7.5% to record lows this morning…

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As far as the truce is concerned, we leave it to Bloomberg’s Richard Breslow to explain the idiocy…

For a truce that people keep celebrating — the 11th day  — there seem to be a lot of people still dying, troops moving around, still questions about more sanctions, ultimate effects on Russia eco, the local markets look quite ill.

Russia itself has put out dire f/casts, growth down 3%-4% and recession;

RUB made yet another all-time low, seems to     have quieted, Micex is up, hryvnia getting pole-axed

Additionally Luhansk Rebels Would Like to Switch to Ruble, RIA Says

Self-proclaimed Luhansk People’s Republic hopes it won’t have to use Ukraine’s hryvnia much longer, RIA Novosti reports, citing republic’s leader Igor Plotnitskiy.

Plotnitskiy says political issues complicate matter, though he doesn’t expect hryvnia to be used for much longer: RIA

Luhansk still must resolve many economic, financial issues, including development of banking system: RIA

And then there is the IMF! (Source: e-news)

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Which likely confirms BofA’s warning of the potential for a Hyrvnia devaluation

Central bank may have to further deplete FX reserves, now near “critical level” of $15b, Bank of America Merrill Lynch economist Vadim Khramov says in report

Natural gas purchases for winter to widen current-account deficit: Khramov

“We see risks of 10%-20% hryvnia devaluation from the current level within a year”: Khramov

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But apart from that, everything is under control in Ukraine. Given the extent to which the UAH is falling and the strong language from the IMF, one could be mistaken for thinking the USA is pushing for another leader to be put in place once again…

1 thought on “Ukraine Currency Crashes To Record Low As IMF Blasts ‘Gross Abuses’

  1. Bastards are really waging war on them……..bringing in the bankers tells me they are desperate. They will not win the Ukraine….it is part of Russia. All the bank tricks, all the lies and crap will not change the fact the Ukraine is part of Russia, not the US. Most of the people despise the US puppet government, and this nonsense will drive them to throw them out……..and they will join Russia.
    You cannot change a person’s sense of heritage by squeezing their bank accounts.

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