The volume of placement of government bonds in national currency for Jan-June 2019 was $ 121 billion, which is almost four times higher than the corresponding figure last year (33.5 billion). The portfolio of non-residents for half a year has grown ten times: from 6.3 billion to UAH 64.4 billion (as of July 11, 2019). These processes, contributing to the strengthening of the hryvnia exchange rate in a short span of time, creates substantial devaluation risks for the future, which by the force of the impact can greatly exceed the effect obtained revalvatsionnye.
About this in his article for ZN.UA writes Michael jooss, head of the research Department, monetary and foreign exchange regulation the Expert-analytical center “Optima”. According to him, the national Bank is trying to convince the public that the decline in inflation rate in 2018 was due to tight monetary policy. This would be true if inflation was triggered exclusively by excessive demand, but it is not.
“Inflationary pressure shape factors from the expenditure side. Range of these factors is very broad and diverse: the devaluation of the hryvnia, increase of energy tariffs for population and business growth in fuel prices, increase in excise duties, high costs of loan servicing, corruption rents, the high level of monopolization and the like, – said the expert. – Sorry, but the national Bank is located in a parallel reality, in which GDP in 2018 has reached and even exceeded its potential level. That is, according to his logic, there were overheating of the economy, resulting inflation causes excessive aggregate demand, and this demand should be limited by increasing interest rates. But the estimates of the NBU have nothing to do with the real condition of Affairs in the economy.”