IMF suggests Ukraine devalues hryvnia – Bloomberg
18 October 10:12
The International Monetary Fund is demanding that Ukraine devalue the hryvnia.
Bloomberg reports this with reference to sources, "Komersant Ukrainian".
“The National Bank of Ukraine is under pressure from the International Monetary Fund to devalue the national currency of the war-torn country,” the publication says.
According to the authors, this proposal could provoke tensions in Ukraine on the eve of important negotiations on a new loan package for Ukraine. At the same time, forecasts in favor of devaluation are limited, as Ukraine’s budget largely depends on direct international assistance, and devaluation could “trigger inflation, which could destroy the financial cushion.”
Devaluation could also have political consequences. According to one source, Kyiv is unlikely to take this measure as the conflict with Russia continues and public fatigue grows.
“National Bank of Ukraine officials are resisting such a move, citing risks to inflation and public sentiment, the sources said, speaking on condition of anonymity because the talks are taking place behind closed doors,” Bloomberg writes.
The differences in economic policy pose a potential threat as Ukraine seeks a new loan package from the Washington-based lender, with the war with Russia entering its fourth year. Ukraine has received most of the $15.6 billion in the IMF program agreed upon in 2023, and the two sides are now negotiating a new package that could total $8 billion.
