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Devaluation pressure on the hryvnia continues

August 22, 2012

I am not an economist, nor am I a banker, financial analyst, Forex trader, or a particularly interested fiscal and monetary watcher.

However, I have mentioned the devaluation of the Hryvnia several times in the past 12 months, most recently here, and maybe somewhat bravely (or foolishly) predicted a Hryvnia/US$ rate of 9.5 – 10 before the middle of 2013 in several dots within cyberspace as well.

A significant devaluation from the Hryvnia/US$ rate of UAH 8/1 US$ of today.

As I have said, such events will not occur until after the elections at the end of October this year if they occur at all.  Having predicted for more than 12 months that it will happen, I am not about to state otherwise now as nothing has changed for the better as far as I can see.

In fact, recent moves by the National Bank of Ukraine have only reinforced my opinion.  It is a move which does nothing other than confirm my longstanding forecasts of devaluation after the October elections.

What’s more, I really don’t think the NBU policy will work.  It is simply too easy to circumvent it.

I have already put my money where my mouth is some time ago and moved out of the Hryvnia and into GBP Sterling, US$ and Swiss Franc.  It still appears to me to have been a wise decision.

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