Political unrest in Ukraine threatens currency

Political unrest in the Ukraine has meant that the currency has now lost value and parliament had to take emergency action last week in order to pass legislation that agreed terms with the International Monetary Fund (IMF) for help to the tune of $16.5 billion.

As the nation’s currency is tumbling and debt standing at $100 billion as a current liability, both the economy and the financial system that supports it are all in danger.

President Viktor Yushchenko has had to call off an early election against Viktor Yanukovych in order to focus on dealing with the financial instability within the country, although economists indicate that it is the lack of economic stability that is really affecting the balance sheet.

As a result of the current situation devaluation has been deemed inevitable as the hryvnia has not been steady against the dollar in 2008.

In September it was at 4.85 hryvnia per dollar and fluctuated as much as eight percent by the end of the month.

As part of its financial deal, the IMF has advised the country to move away from the exchange-rate system towards an unmanaged one, however no attempts were made to secure any respite politically.

There has been much speculation and political debate about the potential beneficiaries of the loan which has been agreed with the IMF. Communist party leader Pyotr Simonenko has argued that it has been made for the sole benefit of the oligarchs and their cronies and that the deal will help neither the economy or ordinary citizens.

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