You're reading: Ukrainian bankers: USA will avoid default, hryvnia will remain stable

U.S. politicians will vote for a deal they hammered out on Sunday to avoid a technical default, which will protect the global currency market from fluctuations and allow the Ukrainian hryvnia to maintain stability, according to Ukrainian bankers polled by Interfax-Ukraine on Monday.

"The U.S. will make the maximum use of all legal loopholes, and the voting deadline will be slated to the last day possible. There will be a tremendous political game, the point of which is to see who gains the most. But, in the end, the sides will come to a certain agreement closer to D-Day," said Anton Stadnik, the head of the treasury department at First Ukrainian International Bank (FUIB).

In his opinion, the U.S. national debt problem is extremely exaggerated.

"The dollar occupied a significant part of the gold reserves in all countries. However, central banks haven’t started selling this currency in bulk against the backdrop of the ongoing information war," he added.

"Even today it is clear that the U.S. political forces are willing to compromise, and the process of achieving a compromise is nearing completion… We do not expect significant fluctuations of the hryvnia-dollar forex rates this week. The market continues to work with a fairly narrow spread in the narrow band between UAH 7.995 per U.S. dollar and UAH 8.002 per U.S. dollar," said Oleksiy Blinov, the head of the analytical department at Alfa-Bank (Ukraine).

"We consider the U.S. defaulting on its obligations as extremely unlike. Mainly because it will have an extremely detrimental impact on the world economy, taking into account the position of the U.S. dollar as the primary reserve currency and the amount of investment in U.S. government securities," said a chief analyst at Raiffeisen Bank Aval.

"No catastrophic consequences for either the global financial sector, or for the financial sector of Ukraine, as expected, have happened. The Ukrainian population’s fears of the default in the United States have turned out to be groundless, yet it [will be] a subject of discussion in the country until August 2," said Vice Governor of Bank Finance & Credit Serhiy Borysov.

At the same time, Anatoliy Kinakh, the president of the Ukrainian League of Industrialists and Entrepreneurs and an adviser to Ukrainian President Viktor Yanukovych, said that the solution found in the United States doesn’t serve as a cause for the Ukrainian authorities to relax, as the situation in the Ukrainian economy is largely tied to the situation on foreign markets, while the public debt and the level of dollarization are at a high level.

"The United States has managed to find a compromise solution to avoid that country’s default, and consequently the destabilization of the entire global financial and economic system. This is definitely a positive solution, but this is no way a cause for Ukraine, which has serious problems with [its own] public debt, to relax," he said.