Ukraine Faces Full-Scale Financial Crisis; Hryvnia Down Substantially

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Ukraine Faces Full-Scale Financial Crisis; Hryvnia Down Substantially
By United Nations Cartographic Section; Alex Khristov. [Public domain], via Wikimedia Commons

Ukraine is in a full-scale financial crisis as the country’s GDP dropped 7.5% and its inflation went up 21% in November, according to central bank Governor Valeriya Gontareva.

Gontareva said Ukraine’s banking system is non-functioning and the hryvnia has become the worst (or one of the worst) performing currency worldwide. The hryvnia fell 48% against the dollar this year.

According to Gontareva, it is impossible to keep the exchange rate for hryvnia stable. She said, “This is simply an unrealistic task [to maintain exchange rate stability] because it is not even prescribed in any constitution. The exchange rate of our currency relative to our trade partners is a mirror of the state of our economy and our balance of payments.

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Ukraine is hit by a “full-scale financial crisis. The level of gold and foreign exchange reserves has reached its minimum of $9.9 billion as of early December since 2009,” added Gontareva.

Ukraine’s central bank spent $1.3 billion of its reserves in supporting the hryvnia and it will continue to implement measures to limit its decline, said Gontavera.

When asked if the country will default on its debt, the central bank governor replied, “I don’t think Ukraine needs to be a pariah country.”

Conflict triggered full-blown financial crisis in Ukraine

The current economic situation of Ukraine was negatively impacted after the conflict with the eastern separatist and Russia’s takeover of Crimea, according to Gontareva.

Prime Minister Arseniy Yatsenyuk recently stated that the conflict drained 20% of the economic potential of Ukraine. On the other hand, the United Nations estimated the more than 4,700 people were killed during the fighting.

The United States and European Union imposed sanctions against Russia and accused President Vladimir Putin’s administration of supporting the separatists with money, weapons and fighters. Putin denied involvement in the conflict, but he stated that he respected the wishes of the separatists.

Ukraine aims to expand rescue package from IMF

The lawmakers in Ukraine approved a 2015 budget on Monday. In addition, the lawmakers are taking further initiative to unlock the tranches of the $18 billion bailout from the International Monetary Fund (IMF). Ukraine’s central bank expects to receive three tranches of the rescue package early next year.

Ukraine is also trying to expand the rescue package. Prime Minister Yatsenyuk said the country needs at least $10 billion to prevent default. Meanwhile, the European Union estimated that Ukraine needs additional $15 billion to remain financially solvent.

On January 8, the IMF mission will return to Kiev and it plans to move expeditiously to continue its discussions with the government to implement a program to stabilize its economy and restore a sustainable growth.

 

Updated on

Marie received her Bachelors Degree in Mass Communication from New Era University. She is a former news writer and program producer for Nation Broadcasting Corporation (NBC-DZAR 1026), a nationwide AM radio station. She was also involved in events management. Marie was also a former Young Ambassador of Goodwill during the 26th Ship for Southeast Asian Youth Program (SSEAYP). She loves to read, travel and take photographs. She considers gardening a therapy.
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42 COMMENTS

  1. “Your brain is damaged.”

    Thank goodness. If/when imbeciles like you start agreeing with me, that’s when I know I’m in trouble.

    You wasted your time, Gomer. I did not, as I didn’t bother reading beyond line 1; just now saw that you posted more drivel here.

    The bottom line, and the good news is: the folks in power (i.e., not you) throughout Europe and several other parts of the globe know the truth. And they are collectively inflicting serious economic damage on the war criminals in the Kremlin, and sadly, the propaganda-brainwashed populous supporting them. It will be up to that populous to decide if they want Rossiya to put itself back on track to join the civilized world, as a country governed by Rule of Law (domestic and international); or governed by an autocratic megalomaniac who invades and kills his neighbors. If they’d rather sing the ex-Soviet anthem while enabling Putin to continue building palaces for himself and stealing their money, as the vast majority becomes destitute – that’s their choice, I suppose.

    Spew whatever you want here, dolt. It’s irrelevant. Means less than zero, bud.

  2. Your brain is damaged. That is the only possible reason why you can hold such profoundly contradictory views and not suffer massive seismic cognitive dissonance that would shatter your consciousness.

    Look, let’s assume your warped view of what is happening in Ukraine is accurate: “territory being forcibly stolen by Russian-backed separatists”. Let’s ignore for the moment that these “Russian-backed separatists” live there and it has been their home for generations. I realize that concept will trigger some cognitive dissonance brain-shake in you, so just ignore it for now.

    This next question will be difficult for you, but it has profound implications, so pay close attention, perhaps even reread it a couple times before you commit to an answer: Who are the “Russian-backed separatists”? A) Small bands of “terrorists” supplied by Russia who are trying to impose their will on the people of the Donbass region, or B) The majority of the population of the Donbass region.

    It is important that you sort this point out because the implications are profound.

    If the answer is (A), then the senior citizens whose pensions have been suspended have nothing to do with the conflict. They are being victimized by the “terrorists” on one side and the corrupt Kiev regime on the other.

    On the other hand, if the answer is (B), then you have to acknowledge that Kiev’s entire “Anti-Terrorist Operation” is a punitive assault upon the general population of the Donbass region in an effort to force the people there to submit to the will of the Kiev regime. As such, Kiev’s attack on Donbass would be a massive violation of international law and every shot fired by the Ukraine army would be a war crime. As well, punitively violating the state’s contractual obligations to individuals in the region is not only felonious fraud, but also a war crime itself.

    You are attempting to believe that the answer is both (A) and (B) at the same time, so that you can imagine the Kiev regime’s attacks on Donbass are justified, while believing the contradicting conclusion that the Kiev regime’s attack on senior citizens in the region is also meaningful and justified.

    Tl;dr: If Kiev is attacking the population itself in Donbass, then those attacks are not justifiable and are in fact war crimes and crimes against humanity.

  3. You are really in a terrible state of nervous irritation, aren’t you? I think it’s a good thing. Now you are in a position to be able to reconcile yourself with the truth…. even if “Merkel. Hollande, Cameron; it’s Abbott and Abe. It’s Komorowski. And Grybauskait?. And Ilves. And B?rzi?š. It’s Harper. And Rutte. And Fischer” tell you otherwise.

  4. Nothing I wrote is an attempt to build a “pretty compelling case” for you, Gomer There’s no point in trying to educate a person whose brain is as logically eff’d up as yours is, bud. That’s self-evident.

    As I said about 10 times – I’m simply pointing out that what you believe to be true…simply does not matter – and so you are free to blather away. Period. Full stop.

    How is it possible that you don’t understand plain English? How do you confuse demonstrating for you how irrelevant your opinion is…….with trying to build “a compelling case”? omfg, you people are dumber than a box of rocks.

    Look…bubbe….don’t waste my time with more stupidity. I don’t have time for idiots. Go be a troll somewhere else….thx.

  5. The truth can sometimes hurt but you should get used to it. But I must admit you make a pretty compelling case by citing “Merkel. Hollande, Cameron; it’s Abbott and Abe. It’s Komorowski. And
    Grybauskait?. And Ilves. And B?rzi?š. It’s Harper. And Rutte. And
    Fischer”. Really! If they say it is so, then it must be! I’m being sarcastic you poor idiot!

  6. “I’m sorry of you don’t like the truth…”

    Oh, it’s not what I “like” or “don’t like” that matters. Or what you “like” or “don’t like”, bubbe.

    It’s what the leaders of the Free World know to be the truth – and the disciplinary actions that they have taken – and are taking – in accordance with that truth….that matters. And of course, we’re not talking about “just the U.S.”, or “Obama”, bubbe. Oh, no. It’s Merkel. Hollande, Cameron; it’s Abbott and Abe. It’s Komorowski. And Grybauskait?. And Ilves. And B?rzi?š. It’s Harper. And Rutte. And Fischer….among several other World Leaders, who have hit back at Russia for their invasion and theft of sovereign territory in Ukraine. As I said – most of the Free World understands quite well “the truth”, Gomer. And they are taking firm actions against Rossiya accordingly.

    So as I said….please go ahead, and blather on to your heart’s content, about “your truth”. It makes no difference whatsoever.

  7. Wow. Looks like dementia to me, bubbe. Do you see dead bodies also?

    I sincerely hope you have a care-giver.

    But look….it doesn’t matter what kind of nonsense floats around in your empty skull. And why not? Because every leader in the world accepts the legitimacy of Ukraine’s election. Yes, even Vova Putin had to say that he would respect the will of the Ukrainian people, and that he will work with Poroshenko.

    So bllllllather to your heart’s content about “murdered candidates” (which candidate…exactly…was murdered there, Gomer??), about fascist/neonazi/junta-coup d’états/Nuland/joebidensson/ JohnMcCain….and the rest of your Kremlin Dept. of Propaganda kaka. Because your lies don’t make one….iota….of….difference. Suck on that for awhile, durak…. :-p

  8. ‘ Proven absolutely to be lies by the May presidential election, bud.’

    You mean the presidential polls where any candidates against the coup regime were blocked by the courts, terrorized by fascists until they quit or simply murdered? Giving the Ukrainians what we in the West have had for many years. A ‘democratic choice’ between tweedle-dee or tweedle-dum. The rest was that according to the junta itself, only slightly over than 50% of eligible voters bothered to vote. The real number was probably somewhat smaller but 50% was needed or the election would have void.

  9. “Just because they live in a different country doesn’t mean their pensions are no longer valid. For example, if they moved to Florida, they would still get their pensions.”

    omg….Does time make you people even more stupid??
    Do you really think that “moving to Florida” is in any way comparable to territory being forcibly stolen by Russian-backed separatists? ROTFLMFAO!!!

    The Kremlin-backed separatists – along with the Kremlin – have at this point stolen land and mineral assets worth hundreds of billions of dollars.

    But somehow….you expect Ukraine…to actually send money into the region…….that was taken by Kremlin military force?? What’s next: that Kyiv must rebuild the Donetsk airport for the Russian invaders and their paid thugs?

    OMFG. The only possible explanation for this idiocy: centuries of vodka abuse has resulted in severe genetic damage to the thinking capacity of today’s Russians, and their paid trolls……

  10. “It is a most comical thing…”

    Well, it’s wonderful that you get kicks seeing Russia’s sphere of influence shrinking to the size of a thimble….since it keeps happening…again…and again…and again….and again…

    The only question is: which will be the next ex-soviet state/satellite to try to escape Kremlin Korruption and Kontrol?

    But hey…look on the bright side: it’s yet another opportunity for you to get your jollies, paulkisling. :-D Bon appetit!

  11. “independent opinion polls show a minority of the population of Ukraine wanted to sign the agreement with the EU….”

    Well, that line of kremlin poo got flushed down the toilet the minute Poroshenko was elected in a landslide Presidential victory in Ukraina, didn’t it. Poroshenko took 55% of the popular vote. 2nd place – another West-leaning politician – Y. Timoshenko….took 13%. His margin of victory was so great over any communist or east-leaning candidate – that even if all eligible voters in Crimea and Donbass had voted – it wouldn’t have been enough to beat Poroshenko.

    And of course – central to Poroshenko’s platform was completing the EU agreement that Yanukovych had PROMISED to sign in the presidential campaign – but then reneged on that promise…for some “strange reason”.

    So your words here are nothing but….your words. Proven absolutely to be lies by the May presidential election, bud.

  12. They remind me of goats who stick their heads through a fence to get to the grass then they notice the grass on their own side after they stuck their heads through and try to reach around to get it. It is a most comical thing. But it is an apt description of nations that join nato while ‘escaping’ Russia.

  13. Heavy Weapons and artillery do not work on Snipers. If the people of Donbass truly were against them they would go to ground. I also noticed you refused to tell how many people were available to fight. Roughly 10 million young fighting age individuals. If you think a few Russians with Heavy weapons and artillery can stop 10 million people you are insane! Perhaps you should try parroting ACTUAL FACTS and not what the defense ministry in kiev tells you to… Its all googlable.

  14. No country in the world in worse financial shape than Ukraine.

    Of course, there is Greece, but they have never been in as bad a shape as Ukraine is right now.

  15. That would be a good idea, but Ukraine still has to pay the pensions of the people of Donbass. They worked and paid for those pensions. Just because they live in a different country doesn’t mean their pensions are no longer valid. For example, if they moved to Florida, they would still get their pensions.

    Of course, Porky and Yats, being as crooked as dogs hind legs and as corrupt as any previous Ukrainian leaders, would want to pocket those pension funds, or trade them to Goldman Sachs for worthless derivatives and some kickbacks, but they are in the spotlight right now and might not be able to get away with it.

  16. President Poroshenko yesterday declared that Ukraine cannot win a military victory over the Russian Seperatists in eastern and southern Ukraine, and so the smart thing to do on the Jan 15, 2015 meeting with President Putin is to sign Surrender Papers ceding all of eastern and southern Ukraine to the Russian Federation ! Jan 1, 2015 at 7:41 pm PST.

  17. The vast majority of the population of Sweden and Finland is against joining NATO. Of course only a fool would believe the government follows the will of the people but the people are so hostile to joining NATO the governments won’t be able to risk joining.

  18. Are you serious? I suspect you are deluding yourself which is why you brought it up. Where are the ATC recordings? That’s right. The Ukrainian junta can’t produce them because they have been lost. Where is the NATO radar data (they were having exercises in Western Ukraine at the time)? That’s right, they can’t hand them over for legal reasons. What about the black box data? At first it was going to be produced 24 hours after they were handed over, then it was delayed by a week and then it was delayed by over a year. We arte never going to know what that data shows. Never mind. We have a You Tube of an intercepted phone call uploaded less than 4 hours after the plane went down and then, ever better, a video of the missile system, minus one missile, being ‘secretly’ transported back to Russia in broad daylight without even a bed sheet covering the missiles.

  19. I’m not supporting the Putin regime in Russia (though I would say it’s better than the regimes we have in the West) but the fact shows that both before the coup and still now, independent opinion polls show a minority of the population of Ukraine wanted to sign the agreement with the EU.

  20. Ukraine is just another in a loooooong line of countries that escaped the klutches of the Kremlin as soon as they had a chance.

    Heard of Lithuania? How ’bout Latvia? Estonia? Poland? Yeh,,,Igor – they ran as fast as they could run to get away from Rossiya’s Corruption and Control. Ukraine is just the next to do exactly…the…same…thing.

    How is it possible for this not to be crystal clear? How many countries have to run from Moscow before you duraki realize that THE PROBLEM here….THE REASON these countries are willing to risk life and limb to get away from the Kremlin……is IN the Kremlin itself?

    It’s so painfully obvious at this point, with so many countries doing the same thing……you ‘people’ must have some sort of brain disorder to not be capable of getting it.

  21. “We’re talking about a country with 45 or 46 million people vs a few thousand Russian soldiers….”
    Could you make a more ignorant statement if you tried? I think not.

    About a million people cleared out of Donbass due to the fighting. About half went to Russia, which is safer than trying to head west, with terrorists who hate anyone who leans west, roaming the roads throughout Donbass.

    So why didn’t the half million or so who went west, join with Ukraine’s army, to fight the Russian soldiers and the other mercenary thugs, armed with Russia-provided Kalashnikovs, RPG’s, BUK missiles, tanks, IED’s, backed by Russian military firing missiles into Ukraine from just across the border?
    Do you REALLY need that question answered, D Gamboa? Does “D” stand for “Durok”? The question should be crystal clear for you in the above paragraph. Let me spell it out for you: H..E..A..V..Y….W..E..A..P..O..N..S. & A..R..T..I..L..L..E..R..Y.

    Secondly – your “45-46 million” includes every man, woman, and child in the country…BEFORE Crimea was stolen, and BEFORE Donbass was invaded. The number of healthy, war-aged people in the country is a fraction of that number. So don’t be stupid with your “45-46 million” garbage. I know…that’s asking a lot of you. Ukraine is a poor country that struggles to feed people and keep them warm. And you want to say they should all go fight an army backed by the Kremlin? Are you phucking stupid?? Asked and answered, Gomer Gamboa. Asked and answered.

    Ukraine is just another in a line of countries that moved as quickly as they could to escape the clutches of the Kremlin. Heard of Lithuania, Latvia, Estonia, Poland? Do you somehow NOT know that they bolted from Russia as soon as they could? That was THE PEOPLE’S CHOICE, Durok, to gain their freedom from Rossiya. And it’s the same for Ukraine. The People of Ukraine are FED UP with RUSSIAN CORRUPTION AND CONTROL….EXACTLY what motivated the Baltic countries and Poland to escape from under Moscow’s thumb.

    Your political affiliation is irrelevant. What is relevant – and crystal clear?: you’re an uneducated idiot, who parrots Kremlin Propaganda.

  22. Maybe attacking their own citizens, destroying their own mines and factories, and refusing to hold any meaningful negotiations were not particularly good decisions.
    Of course, America is happy about it. Congress just ponied up $350 million dollars in weapons so that people who have no food, no electricity, no warmth and no currency can keep killing each other during the winter. All hail Poroshenko and his links to the generous war mongers in Washington.

  23. You must feel much better now that you have pooped out all the emotional crud. “Imperialism”, “yoke of slavery”, “needs all the potatoes for food”, “Heil Fuhrer”. Have you ever expressed a rational thought based on facts? Russia has concluded several advantageous business deals with China, but it doesn’t ask for handouts and you have NEVER seen a photo of Russian troops destroying anything in Ukraine. According the the OSCE, there are none there. That massive destruction is the job of the AZOV battalion and the Right Sector. The rebels are fighting in their own territory and don’t destroy their own homes and factories.

  24. You have NEVER seen a photo of Russian equipment in Ukraine or any Russian army unit there. You have seen dozens of photos taken in Russia and claimed to be in Ukraine and photo’s of Ukrainian tanks mis-labeled “Russian tanks”. The only impartial observer in the area is OSCE and they have NEVER seen a Russian tank, artillery piece or Russian army unit in Ukraine.

  25. This Russia “destroying the Donbass region” makes absolutely no sense.
    If Russia destroyed it, rather than Kiev and west Ukraine, then why didn’t the people of Donbass kick out those Russian troops.

    We’re talking about a country with 45 or 46 million people vs a few thousand Russian soldiers.

    The story that does make sense is that Kiev and west Ukraine destroyed the Donbass region and Russia stepped in to prevent Kiev from subjugating the Donbass region.

    Which makes me wonder, despite being American, who the “good guys” vs the “bad guys” really are….

    Of course, the reality of the situation is that this was first and foremost a civil war between east and west Ukraine and we picked one side, and Russia picked the other. This is more like a good old fashioned proxy war, like Korea and vietnam only right on Russi’as border.

    Leave it to the Democratic Party (I’m a moderate Democrat), to start another proxy war with Russia to try to prove their tough.

    I’m really getting sick and tired of my Party. I’ve been seriously considering switching Parties….

  26. I just got off the phone (Skype) with my friends in Poltava, Ukraine. One is scheduled to come home and just discovered that all the “route taxis” that shuttle people to Kiev have ceased operations. There are about 5 companies that run vans hourly but without warning they have disappeared with no explanation. Something is definitely cheesy. My first thought is Organized crime, but in this new day maybe some E.U. regs or something?

  27. Meanwhile Russia is shipping free coal to Ukraine to keep their lights on because the idiot fascists in Kiev blew up the mines supplying their power stations in order to spite the people of Donbass.

    With Crimea and the industrial heartland out of their hands, Kiev has little to offer the IMF in exchange for more “loans”. The austerity in Kiev will already be extreme due to Porky and Yats’ efforts to meet existing IMF demands. Top that off with roving bands of murderous skinhead punks under the employ of various oligarchs and it’s clear there is no hope for anything like a recovery in Ukraine for a generation or more.

  28. NATO loving trolls are morons? You mean like Sweden and Finland who now are considering joining NATO because of Russian IMPERIALISM! Russia is begging China for bailouts and will become a satellite of China. You Russians have been destroying the Donbass and there are enough independent reporters and photos to prove it. Just go to the Maidan as I have to see the photos. You Russians deep down are so jealous of Ukraine because Ukraine has thrown off the Kremlin yoke of slavery, are now free, and are ridding itself of corruption in government and business which it must in order to join the EU. Eat your heart out slug and lay off the vodka this early in the day. Your boss Heir Fuhrer putin needs all the potatoes for food not vodka now that he has banned food from the west which used to feed his slaves.

  29. You got that upside down stupid. It was the Russian puppet president of Ukraine , Yanukovych that was taken to Russia and hidden. It was the 2 RUSSIAN CITIZENS WHO WERE MILITARY MEN who ran back to Russia as the Ukraine army advanced against them and after 1 of them was caught in a phone conversation after the Russian little green men shot down the civilian airliner. One of them was seen when Russia invaded Crimea. So these 3 men hide in Russia SO THEY CANNOT BE INTERROGATED FOR THEIR ROLE in breaking International Treaties and Invading another country.

  30. NATO loving trolls are morons? You mean like Sweden and Finland who now are considering joining NATO because of Russian IMPERIALISM! Russia is begging China for bailouts and will become a satellite of China. You Russians have been destroying the Donbass and there are enough independent reporters and photos to prove it. Just go to the Maidan as I have to see the photos. You Russians deep down are so jealous of Ukraine because Ukraine has thrown off the Kremlin yoke of slavery, are now free, and are ridding itself of corruption in government and business which it must in order to join the EU. Eat your heart out slug and lay off the vodka this early in the day. Your boss Heir Fuhrer putin needs all the potatoes for food not vodka now that he has banned food from the west which used to feed his slaves.

  31. The coup regime must be brought to account. I suspect the high-ranking plotters will be spirited away to the US so they can’t be interrogated on the role of the US and EU in the coup.

  32. You take everyone for some Kremlin Katsap durak? You lying Russian fvk, you think we didn’t see Russian military in Krim and Chechens in Donbass? They are still there in Donetsk. Now troll RT.

  33. No, it’s not too late. I have seen countries in much worse financial trouble than Ukraine and they are doing fine now.

  34. A country should not go to war, West versus East, especially when it has to beggar the IMF for money to do so. And what has been the value to the country in destroying Donbas? Nothing at all, and pointing the finger at Russia all this time while denying your own responsibility is not a good indication that shows that Kiev understands that it has to live in the real world and act responsibly.

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