Ukrainian Hryvnia Foreign Exchange


Ukrainian hryvnia foreign exchange rate to weaken further in 2012

Published on March 21, 2012 by   ·   No Comments

The Ukrainian hryvnia foreign exchange rate will likely weaken further in 2012, according to the chief financial officer of Ferrexpo PLC, citing that he expects inflation in the Ukraine to continue slowing and to be between 7 percent to 8 percent in 2012.

“The balance of probabilities is towards hryvnia weakening,” Christopher Mawe said, as he reported a 34% increase in full-year profits for the Swiss-headquartered iron ore company which has assets in the Ukraine.

He noted that the strength of the Ukrainian currency would depend on many factors, including the price the country pays for natural gas from Russia; the progress of talks with the International Monetary Fund over the resumption of Ukraine’s $15.6 billion bailout loan; and the country’s ability to access international debt markets.

Negative Ratings

Meanwhile, S&P have revised Ukraine’s outlook to negative, stating that Ukraine faces significant external and fiscal funding challenges.

“We are revising the outlook on our long-term sovereign ratings on Ukraine to negative, reflecting our opinion that ongoing uncertainty about the Ukraine government’s negotiations with the IMF and Gazprom is increasing refinancing risks.

We are affirming our ‘B+/B’ long- and short-term foreign and local currency sovereign credit ratings on Ukraine.

On March 15, 2012, Standard & Poor’s Ratings Services revised its outlook on the sovereign credit ratings on Ukraine to negative from stable. At the same time, we affirmed our ‘B+/B’ long- and short-term local and foreign currency sovereign ratings on Ukraine.”

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