With the Russian ruble cratering, Kiev recently had to remove a currency peg of 13 hryvnia to the dollar. It dropped 15 percent in the next five trading sessions. From a rate of 8 to 1 a year ago, it now cost 16 hryvnia to buy a dollar. With the banking system in peril, a third of deposits had been withdrawn—before the currency collapsed, this is. “There is no way to repair this damage by doing some kind of recapitalization exercise that may still work in the eurozone,” the RBS man writes. Efforts to stem the hryvnia’s fall have dangerously depleted foreign currency reserves. As of October, the central bank had $12.6 billion dollars in assets—taxi fare in the context. Ukraine owes Russia $1.6 billion in gas bills by yearend—and then faces fees of $700 million a month for new supplies. The Ukrainian automobile association, to burrow in slightly, just reported that new car registrations fell by 65 percent in October from the previous year, to 5,900 units—this in a nation of 46 million. The No. 1 producer, Saporisky Awtomobilebudiwny Sawod, turned out 1,007 vehicles. It has 21,000 employees on the payroll.
Posted on: Thu, 25 Dec 2014 10:02:53 +0000