Kyiv attempts to lower currency concern as Fitch downgrades Ukraine
Ukraine’s central bank has imposed currency controls to try and prop-up the hryvnia.
It is limited private exchanges of dollars from the region to around $5,700 per month.
There’s also a bar on purchases of forex for international investment or for early repayment of loans.
“There have now been traces to the currency market lately, but we’re sure this really is merely a short term development,” the governor of the National Bank of Ukraine, Ihor Sorkin, told a news conference.
“The National Bank will improve monitoring handle available on the market to try and reduce speculative demand …. Once The condition improves, these short-term measures is likely to be removed.”
Experts warned the techniques could encourage a thriving black-market in dollars.
Ukraine’s debt situation has left it to the brink of bankruptcy amid anti-government protests against closer ties with Russia.
Russia stopped a $15 billion bail-out last week after President Viktor Yanukovich, in a concession to demonstrators, sacked the pro-Russian prime minister.
Moscow says it’ll just restart the money when it knows who’s to become the brand new prime minister.
Following The settings were introduced Fitch downgraded Kyiv’s credit score from B minus to CCC because of political uncertainty and concerns over its debt-repayment plan.
The hryvnia dropped below 9.0 per dollar on Wednesday for the very first time in five years. And Fitch said: “There is just a threat of an uncontrolled and high decline, given the fragile confidence in the hryvnia.”