Following Gontareva's "reforms," the Ukrainian currency market is no longer listening to the NBU...
The events that unfolded on the Ukrainian currency market in August 2016 once again demonstrated that Gontareva's "reforms," like her entire work at the NBU, are nothing more than an attempt to demonstrate her incompetence.
After the hryvnia devalued by 5,2% in August 2016, the NBU made a clumsy attempt to attribute the devaluation to "mythical enemies" who were hindering the reforms of Valeria Gontareva, the NBU's best manager. The National Bank of Ukraine attributes the increased hryvnia volatility on the interbank market to the escalating situation in Crimea and the east of the country, a seasonal increase in demand for foreign currency, and a correction in grain prices. This was stated in a commentary released by the NBU press service on Wednesday. However, the NBU forgot to mention the main reason for the hryvnia devaluation. As usual.
If you look closely at the hryvnia exchange rate dynamics for August 2016, you can notice an interesting pattern.
In early August, the dollar/hryvnia exchange rate on the interbank foreign exchange market and the black market differed by twenty kopecks and was relatively stable. However, when Gontareva made another mistake on the foreign exchange market on August 9, 2016 (Gontareva often provokes a hryvnia collapse with her inept actions in buying up foreign currency on the interbank market), the hryvnia began to devalue. However, this began on the black market, while on the official foreign exchange market, everything remained as before. On the black market, the dollar/hryvnia exchange rate had already reached almost 26 hryvnias on August 16, 2016, while the NBU boasted that the dollar exchange rate on the interbank market was 25 hryvnias. At the same time, Gontareva noted that the black market exchange rate had risen, and most likely, the NBU decided to devalue the hryvnia following the black market.
The dollar/hryvnia exchange rate charts for August 2016 on the official interbank foreign exchange market and the black market clearly demonstrate that the black market, not the NBU, is now the dominant player in the Ukrainian foreign exchange market. Following the "Gontareva reforms," the black market now determines the dollar exchange rate in Ukraine. The NBU, however, merely follows the black market's instructions and sets the dollar/hryvnia exchange rate in Ukraine based on the prevailing trends on the black market.
Never in Ukraine's history has the black market dominated the currency market. The NBU has effectively lost control of Ukraine's currency market. Therefore, when people ask, "What will the dollar exchange rate be tomorrow?" the answer is always the same: "Ask the black market; there's no point in asking the NBU; they don't decide anything anymore." Indeed, the "Gontareva reform" has been a success. Now it's safe to say that the dollar/hryvnia exchange rate in Ukraine is set by the people, or more precisely, the currency speculators who rule the black market.
Alexander Okhrimenko, "Correspondent"
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