Friday, December 19, 2008

Ukrainian hryvnia gains ground against the USD amidst speculation of insider trading

The Ukrainian currency (the hryvnia/grivna) has increased value against the US dollar. Yesterday the hryvnia dropped to a all time low of 10-10.5. Earlier today it was selling at 8.5-9.0 to the US dollar.

Less then six months ago the Ukrainan hryvnia was trading around 4.85 to the US dollar

After years of robust economic growth, Ukraine has sunk into a deep recession, pressured by a drastic fall in the exports of steel, the core of the economy. A lack of confidence in the banking system, coupled with constant political turmoil under President Viktor Yushchenko has spurred a sharp devaluation in the national currency

The collapse in the value of the local currency has prompted allegations of insider trading and speculative involvement by Ukraine's National Bank and the Office of the president

Prime Minister of Ukraine, Yulia Tymoshenko, has indicated that she will call on international organizations to investigate into laundering illegally acquired money if the central bank of Ukraine does not stabilize the hryvnia’s value in the nearest future.

According to the Prime Minister, the hryvnia’s value tumbled due to “special speculative operations planned at the currency market of Ukraine and organized with assistance of the central bank and some other banks of Ukraine”

I can list a number of banks, but I’d like to focus on one of them”, she said

“There is a number of banks that were involved in the same operations. In fact, the bank that was just bought for 600 million dollars, received from the the financial resources at 7 billion 100 million hryvnias”, Yulia Tymoshenko said adding that “the bribes made up from 3% to 7% of the total amount of financing allocated by the central bank to a bank”.

Yulia Tymoshenko pointed out that Firtash [a Ukrainian tycoon] and the Presidential Secretariat are standing behind the Nadra bank today. For them to earn more money, “at present they need to tumble the hryvnia’s value vs dollar. And today a number of special banks, including Nadra bank, are holding nearly a billion dollars waiting for the moment when the hryvnia will fall to the lowest level that could be achieved in this situation. As soon as hryvnia falls to that level, these banks will throw currency at the market, and the hryvnia’s value will strengthen”.

The Prime Minister stated that she has all documents confirming the various financial transactions. She vowed to pass the documents for consideration of parliament and other superiority institutions for review