UKRAINE- Economic news: Dispute about gas at an impasse, the hryvnia stable

Dispute about gas at an impasse, the hryvnia stable allies began to speak on the case

Gas talks between Ukraine and the Russian Federation with the participation of the EU in the week ended unsuccessfully despite the fact that Kiev fulfilled precondition - repaid debts for gas delivered in 2013 for the sum of 786 million dollars. Finance Minister Oleksandr Shlapak unveiled forecast drop in GDP in 2014 and 5% GDP growth next year by only 1.7%. These figures he considers basic for drafting the law on the state budget for 2015. On the last day of its powers, June 6, IO President Alexander Turchinov signed into law a moratorium on alienation of property which serves as collateral for loans. This law is a significant blow to the banking system - will reduce its resistance, which can lead to difficulties in obtaining the next tranche from the IMF. Recall that maintaining the stability of the banking system - one of the commitments that Ukraine took when signing the IMF lending program.

2. President of the European Central Bank (ECB), Mario Draghi June 5 announced the launch of unprecedented measures to mitigate the ECB monetary policy, which should help the ECB to combat the threat of deflation. Measures exceeds analysts' expectations - only the first round includes loans amounting to 400 billion euros at a fixed interest rate. Ukraine stimulus measures in the eurozone create prospects to expand exports from Ukraine to the EU.

3. British Prime Minister David Cameron demanded that Russia recognize the new leadership of Ukraine and stop supporting separatists threatened to use her so-called sectoral sanctions, ie sanctions on entire industries. While European leaders and U.S. leaders discussed measures that will reduce the negative impact of sanctions on the EU economy and the U.S., as well as enhance the effectiveness of measures against Russia. At a meeting in France on the occasion of the anniversary of the Allied landings German Chancellor Angela Merkel and U.S. President Barack Obama has once again demonstrated the support of the position that the Russian Federation is responsible for aggression in eastern Ukraine.

4. The Cabinet of Ministers of Ukraine issued a decree of May 21, the establishment of the State Fiscal Service (GFS) by reforming the Ministry of income and fees. Now the document is formally valid. As a result, eliminated Ministry of Revenue and fees, and she Gosfisksluzhba will be subordinate to the Ministry of Finance. What is important: Gosfisksluzhba itself deprived of the right to prepare the laws by which to live - it was denied the right of legislative initiative.

5. Foreign exchange reserves of the National Bank of Ukraine increased over the past month to 17 billion 899 million dollars - thanks to loans from the IMF and some other financial institutions, as well as purchases of foreign currency in the domestic market.

June 6 interbank foreign exchange market closed with a slight strengthening of the non-cash hryvnia - at 11.85/11.90 hryvnia per dollar. However, if we consider the dynamics of this week, the rate was stable (11.85/11.95 hryvnia per dollar on June 2). Recall that on June 6 currency market working out the application of the June 4.

Cash rate is stable for two weeks - the hryvnia June 6 May average remained at 11.55/11.95 hryvnia per dollar. On June 7-9, the expected level of about 11.50 / 11.95. Recall that the Ministry of Finance predicted average annual rate of 10.5 hryvnia hryvnia per dollar of changes in the law of the state budget in 2014. Also close to this rate of NBU now uses in analyzing the stability of banks during 2014. IMF considers rational corridor 10-13 hryvnia hryvnia for one dollar - in the medium term.

Russian Rouble June 6 the second consecutive day after a half weeks in strength reduction - up to 34.6362 rubles to the dollar against 34.8893 per dollar on June 2. Against the euro, the ruble strengthened as June 6 - to 47.2538 rubles per euro against 47.5024 rubles per euro on June 2. Trend in the weakening of the ruble lasted from May 26 to June 4, which is associated primarily with the geopolitical problems in relations with Ukraine and the deterioration of macroeconomic indicators. Current strengthening situational - a reaction to the European Central Bank announced the decision to lower interest rates and announcements ECB monetary stimulus measures.

The volume of Russia's international reserves steadily declining since the beginning of 2014. Please note that the rate of decline accelerated after the start of the open phase of the conflict with Ukraine, but in the second half of May decline halted.

The article is very misleading...Kiev did not pay their past due debt...they paid less than half which is what the Eu told them to do despite Kiev resisting. As you see the money Kiev is "loaned" is 'turned around' to pay all the large debts owed outside of Ukraine.....that is exactly how they (the IMF/EU) will keep Ukraine a debtor nation under their control politically as well. You do it their way or no funds.

Today Putin made it clear he would not turn oil delivery off but it may be less if the Kiev government continues to default as in the past and moves closer to the EU in trade etc.... and their attempts to find alternative resources other than Russia. Then of course Russia will lesson the amount they import to Ukraine. That's just business.

Further...Russia has already sidestepped Ukraine with alternative pipeline routes outside of Ukraine...so of course Yats woke up realizing that Ukraine cannot function without Russia and begged that South-Stream would not go through, because Kiev needs it's transfer fee monies to sustain operating the country. That was denied. South-Stream goes forward as planned.

Ukraine will no longer be the transfer point for Russia oil, at least Russia will not be dependent on them as they maneuver around Ukraine now and in the future. There is another pipeline going through north Russia to Europe as well which will accommodate any European demands as they look to other resources than Russia....Russia has already moved past Eu and Ukraine and did so once he had Crimea in hand.... Kiev has really done themselves in by their own actions...and that with the Greed of the EU/US for their resources and control of the nation til they are done with it.

Take note that Eastern Ukraine is being heavily bombed now....the plan to destroy the nation enough so the foreign companies can come in and make money "rebuilding"....again funds will go from IMF to outside International Corporations......it's a great scheme where money in money out and all take their cut except Ukrainian people.

However IMO Ukraine will cease to be the pivot nation it has been...it's earmarked now to be a 'debtor state' and nothing they can do about it....the Kiev Gov certainly has all the Oligarchs chopping at the bit as they appoint other Oligarchs to gov. posts, who stripped the country in the first place. In time Maidan will be cleared out of the square but for now they tolerate them until the Eastern battles are done

Ukraine Maidan square the day before the Pres. Inauguration... still with barricades, New piles of tires and tents still raised....refused to move out for Presidential Inauguration...so it's being held elsewhere

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