You're reading: Poroshenko: Hryvnia should be pegged to multi-currency basket

Moscow - Ukraine's policy of pegging its national currency (the hyrvnia) to the U.S. dollar is inefficient in current conditions and should be substituted for a peg to a multi-currency basket, Ukrainian Economic Development and Trade Minister and member and former head of the National Bank of Ukraine's board Petro Poroshenko said.

“The hyrvnia needs to be pegged to a multi-currency basket,” he said on the Svoboda Slova program on the TV channel ICTV on Monday evening.

Besides the dollar, such a basket could contain the euro, the Russian ruble, the Polish zloty and the British pound, he said.

The currencies of all of Ukraine’s neighboring countries have experienced notable devaluations over the last 2.5 months. Meanwhile, the hyrvnia has not fluctuated more than 2% against the dollar since 2009, he said.

“There remain two countries in Europe with a fixed exchange rate – Ukraine and Albania,” Poroshenko said. Such a policy of supporting the exchange rate leads to spending of forex reserves and deteriorates the position of Ukrainian producers, he said.

At the same time, the stability of the hyrvnia is a very important factor in ensuring purchasing power and needs to be preserved. Tying the Ukrainian currency to a multi-currency basket would help keep that stability, he said.

However, Poroshenko noted that the National Bank of Ukraine’s policy does not currently evoke any serious issues.

The official exchange rate on June 26 was 7.9925 hryvnia/$1.