Arbuzov – Hryvnia devaluation is a logical result of Cabinet’s and NBU’s actions

The current situation on the foreign exchange market is a logical result of unprofessional actions of the Cabinet of Ministers and the National Bank of Ukraine, said former NBU Governor and former acting Premier Serhiy Arbuzov in an interview for RIA News Ukraine.

“This is primarily the consequence of an absolutely adventurous decision for “jump over” from the system of exchange rate corridor to its unregulated floating in an instant,” said the politician. He believes that the people nominated by Maidan for the NBU management and economic bloc of the Cabinet had no idea what a floating exchange rate was and what the actions of the regulator should be.

“For several months, the new government sat and passively observed what was happening on the foreign exchange market, believing that its players would independently determine some fair rate. And the market indeed did that. But it also gave assessment to the inaction of the regulator and the blazing war in the east of the country and the lack of a coherent economic course of the new Cabinet of Ministers,” believes Arbuzov.

The politician has reminded that the budget expenditures can be financed by emissions, but it would be naïve to expect market optimization at that. “Over the first five months of the year the NBU has financed over 15% of all government’s expenditures. The central bank issued several billion hryvnia for refinancing of commercial banks. These are all “empty” emission money creating huge risks for the economy already in the medium-term. Furthermore, there is no sense in blaming the market that it reacted to the situation by divesting from the unreliable assets, which the actions of the new government turned hryvnia into,” believes Arbuzov.