Business New Europe: Ukraine close to financial crisis, claims opposition, as election looms

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Oct. 11, 2012, 1:38 p.m. | Ukraine | Politics — by Business New Europe

Mykola Azarov claimed that Kyiv has reduced gas purchases, which drain foreign currency, and added action to stem the drastic reductions in reserves are underway.

The Ukrainian government is under increasing pressure ahead of the upcoming parliamentary elections on October 28, as economic indices slip dangerously. 

Recently, foreign exchange rates have spiked, even as the National Bank of Ukraine (NBU) attempts to maintain stability for the hryvnya. Since October 5, local interbank interest rates have surged, at times as high as 40%. 

According to VTB Capital estimates, NBU forex interventions to support the currency amounted to $1.4-1.7bn last month. “As Ukraine is scheduled to repay the IMF $1.4bn in 4Q12, and the last months of the year are typically ‘difficult’, we expect to see a further decline in NBU reserves in the months to come,” the analysts say. 

Read more here. 

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