Inflation in Ukraine in 2014 will accelerate to 19-20 percent, and the exchange rate has all grounds to strengthen to Hr 12/$1 – its balanced indicator, Finance Minister Oleksandr Shlapak has said.
“We expect that inflation will be around 19-20 percent, unfortunately. This is so-called postponed inflation,” he said on the First National TV channel on Aug. 20.
“As for the exchange rate, it is more complicated. My belief is that there are no grounds for growth of the exchange rate past the indicator of Hr 13.50/$1. Hr 12/$1 is an absolutely balanced exchange rate and it could remain until the end of the year, and we expect it will happen,” the minister said.
He said that the recent devaluation of the hryvnia was linked to the panic entrance of some players to the market due to events in the east of Ukraine and maybe with certain speculation attacks on the exchange rate.
“I’m sure that the NBU has all possibilities to cope with the situation, including to put pressure on currency speculators, or examine who is buying currency in such volumes with a decline in imports,” Shlapak said.
He said that the main reason of the hryvnia devaluation is the deficit of the balance of foreign trade and it was removed.
The minister added that on Aug. 7, the World Bank decided to provide $500 million to Ukraine and in late August the decision of the International Monetary Fund on the provision of the second disbursement worth some $1.3 billion is expected.
“This will calm the situation on the currency market,” he said.
