Hryvnia might nosedive in Q1 of 2009, experts say

“Unfortunately, the Central bank is tackling only short-term problems. There is no overall strategy in Ukraine which would balance currency markets and send a signal to the populace and businesses about the cabinet’s currency policy,” Vasyl Yurchyshyn said.

In his opinion, the hryvnia will continue its fall. When it will stop will depend on which exchange rate the Central bank will accept. Early next year, Ukraine can be exposed to extreme pressure due to worsening situation in the industrial sector. Q1 is likely to be very hard, especially in the social sector, leading to a sharp hryvnia nosedive. “At present, the cabinet has to engage in intense activities in the budgetary and monetary sectors to forestall any pratfalls on the markets. In fact, such steps are envisaged in the IMF program of cooperation with Ukraine. So, it boils down to how much the cabinet will be prepared to meet its commitments,” the expert said.

According to the expert, toward the summer the dollar will rise against the euro. Much will depend on how the crisis will unfold and how effective the anti-crisis steps will be in the USA and EU. The dollar will eventually strengthen even further, reaching the level of $1.15 per 1 euro.