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 Ukraine on the Brink of Disaster: Government Will Default and Collapse Hryvnia, Thinks the Former Minister of Economy

Declaration of default and the sharp depreciation of the hryvnia may be consequences of the fact that the government cannot cope with the payments that must be carried out in 2013.

This was stated by President of the Market Reforms Center,the ex-Minister of Economy Volodymyr Lanovyi in an interview withRadio Liberty

According to theeconomist, the situation in the domestic economy is verynegative.

"National Bank'sreserves have fallen to $ 25 billion. Currency is necessary also inorder to meet domestic demand for dollars. In 2012, the populationof Ukraine has bought $ 10 billion, this is done at the cost ofinternal resources, and here we also have obligations to return themoney for previously received loans," saidLanovyi.

"In addition,there are other credit commitments, which are provided by privateinvestors, the Russians, other governmental and internationalorganizations totaling $ 9.3 billion in 2013. There are noresources, positive change regarding the income of currency inUkraine, which means the country is on the edge of financialdisaster," he said.

Anticipatingfurther developments, the expert suggested that the governmentwould have to default on its debt to private investors. At the sametime the world will ban issuing any loans to thatgovernment.

The old debts willbe delayed, but with increased interest rate. According to Lanovyi,this will lead to a forced reduction of social and many other costsof domestic needs. This, in turn, will seriously worsen the livesof ordinary people.

Speaking on the estimated dollar rate, the economiststated that forecasts of 8,7-8,9 hryvnia to the dollar are toooptimistic. More realistic is the drop of the domestic currency toa mark of more than 9 hryvnia to the dollar.

"There comes a time when the National Bank does not have cashdollars, while sellers will be able to raise the dollar rate. Ifthe regulator makes any administrative, force action, then the salewill go to shadow form. Therefore th regulator will have to give into the rate change," said Lanovyi.

Источник: https://en.censor.net.ua/n230891