Artificial retention of hryvnia dangerous - expert
2011-02-22 17:56:05
The policy of the National Bank of Ukraine and the Government on artificial retention of a stable hryvnia exchange rate is rather dangerous. This was stated by Oleksandr Savchenko, chairman of the supervisory board of the International Institute of Business.
"The stability of any currency is a sign of future risks. Exchange rate fluctuations are normal for any country," he said. The expert added that it is very wrong to pursue monetary and exchange rate policy of keeping the rate artificially.
"If the exchange rate is stable for 5-6 months, this is a sign of future currency shocks. Therefore, the National Bank and the Government should allow the hryvnia to fluctuate. Let it better vary. People will not see plus or minus 0.2-0.3%. But if it stands and then shoots, as it frequently happens, by 10, 20 or even 50%, it is fraught with new financial and economic shocks," the expert said.