Ukraine ceasefire holding as country’s currency collapses

A local woman is overcome with emotion as she looks at blood stains and damage around a wrecked truck of supporters of the self-proclaimed 'Donetsk People's Republic' on road leading to the airport. Picture: MAXIM SHIPENKOV/EPA

A local woman is overcome with emotion as she looks at blood stains and damage around a wrecked truck of supporters of the self-proclaimed ‘Donetsk People’s Republic’ on road leading to the airport.
Picture: MAXIM SHIPENKOV/EPA

The Central Bank said the move was necessary to stabilise the currency amid “unfounded” demand for foreign exchange. ¬†Gontareva said there was no fundamental reason for the panic in the currency market. She said Kiev expects to receive $8 billion from the International Monetary Fund this year. The bank’s decision left the true value of the currency in limbo. Hours after imposing the ban, the central bank offered to buy dollars for 21.7 hryvnias, meaning anyone forced to sell would receive a third less than before the ban, and around half the rate available on the street.

Exchange kiosks in Kiev were selling limited amounts of dollars for 39 hryvnias, around 20 percent worse than rates advertised in the windows of commercial banks where dollars were not available. A construction worker exchanging dollars at a kiosk in a grocery shop in return for a bag filled with thousands of hryvnia, laughed and told shoppers: “Soon we will have to walk around with suitcases for cash, like in the 1990s.” The hryvnia has lost at least half its value so far this year after halving over the course of 2014.

In a potential new blow, President Vladimir Putin warned that Russia would halt gas supplies to Ukraine, for the fourth time in a decade, if Moscow did not receive advance payment. That could disrupt flows to Europe, which receives around a third of its gas from Russia, with 40 percent shipped via Ukraine.

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