Last Friday, reader John told me the “street rate” for currency in Ukraine was not the reported 28 Hryvnias per US$ but rather on the order of 32 per US$.
I asked John where he got his information. He replied, “from my sister who lives in Lviv“.
Lviv is a beautiful city in Western Ukraine.
John did not know what the “street rate” was yesterday, but he informed me the “interbank rate” was 31.50 to 32.50. The interbank rate is higher still today.
Meanwhile, Investing.Com shows a jump today to 32.487 today from 28 yesterday.
click on chart for sharper image
Interbank Rate is 33.5/USD
The above chart is closer, but still not correct.
On February 14, a researcher from Johns Hopkins Institute asked me where I got my rates from. I did not have an official source then, but today I have one.
Please consider The Dollar on the Interbank Market was Fixed at Around 33.5/USD.
Hryvnia exchange rate on the interbank foreign exchange market trading results on Tuesday, February 24, fell to 33.5 UAH / USD from 32,00 UAH / USD a day earlier. The top value today reached 33.80 UAH / USD.
Quotes hryvnia against the euro amounted to 36.2432 / 37.9354 UAH / EUR, RUR – 0.5072 / 0.5315 USD / ruble.
At the beginning of 2015 the hryvnia on the interbank market was about 19,00 UAH / USD.
February 24: The official hryvnia strengthened to 28.29/USD. National Bank Chairman Valery Hontaryeva explained the collapse of the hryvnia shock of transition to a free exchange rate . “We believe that the demand and supply of currency must find a balance, and hence the importance of adequate price” – said Hontaryeva.
Official vs. Interbank vs. Street
Note the “official” rate is still 28.29/USD. One cannot buy dollars at the “official” rate anywhere. And while the foreign exchange rate is 33.5/USD. I strongly suspect the “street” rate is worse yet.
As long as we are discussing various rates, let’s also consider the “2015 Budget Rate“.
Ukraine’s international newspaper, The Mirror (available in English), reported on February 16, Ukrainian Government Changes Rate to UAH 21.7/USD in 2015 Budget.
Thus, Ukraine’s budget is a farce. The move from 21.7 to 33.5 is a decline of 35.22%. That’s how far off Ukraine’s budget is … and worsening weekly, if not daily.
- 2015 Budget: 21.1
- Official: 28.29
- Interbank: 33.5
- Street: Unknown but assuredly higher
At the beginning of 2014, the exchange rate was 8.21 per dollar. From 8.21 to 33.5 is a decline of 75% in just over a year!
And it’s going to get worse.
Full Scale War
Ukraine’s deputy foreign minister announced a “Full Scale War” on Saturday.
Ukraine is broke. It has no means to fight a war. Nonetheless, Ukraine is dedicated to the impossible, with foreign currency reserves dwindling.
Insistence on more fighting will produce more of the same results.
Mike “Mish” Shedlock