11:59 13.11.2012

IMF still recommends Ukraine should introduce floating exchange rate for hryvnia

2 min read
IMF still recommends Ukraine should introduce floating exchange rate for hryvnia

The International Monetary Fund (IMF) still recommends that Ukraine switch to a floating exchange rate for the hryvnia so that the country's economy can withstand external shocks, IMF Resident Representative in Ukraine Max Alier said at the 7th annual Ukrainian Banking Forum organized by Adam Smith Institute in Kyiv on Tuesday.

"Since 2006-2007, we have been putting these recommendations into our reports. We believe that the Ukrainian economy, which is deeply integrated into the global economy and dependent on exports of exchange commodities, is exposed to volatility in the market... We believe that for an economy like this it would be much better to have a floating exchange rate," Alier said.

He noted that in a number of countries a floating exchange rate cushioned shocks on the global financial markets.

At the same time, Director of Emerging Markets Economics Research at Credit Suisse Sergei Voloboev said that the hryvnia exchange rate should not fall by more than 10% from the current level, provided that the cooperation with the IMF resumed.

"I believe that 10% is the highest possible devaluation from the current level, if the external situation improves ... If the government reaches agreement with the IMF, the hryvnia may remain at this level," Voloboev said.

AD
AD
AD
AD
AD