Currency run on Kyiv banks.

[SilverBullet]

The currency run that was reported started in Odessa last week has reached Kyiv. Reportedly several exchange places have at times been out of Hryvnia since many have rushed to exchange their USD. The best exchange rat in Kyiv right now appears to be 4.90, a decline from 5.05.

[P-N]

In Odessa yesterday I saw the rate between 4.50 (lowest) and 4.75, nothing higher.  That does not of course mean it isn't higher somewhere, I just didn't see it. 

[SilverBullet]

I checked with National Bank of Ukraine, the official rate is still unchanged and at 5.05. Many banks are just taking advantage of the fact that many wants to exchange their dollar right now, so the banks are offering low rates. After a while when they are well stocked up with dollar, then the buying rate will be at the official level. I guess it is called business     Some are "panicking" and they have to pay the price, being taken advantage of with low rates right now. They need to get a reality check with the National Bank of Ukraine first, then they will realize that they are selling their dollar too cheap.

In Kyiv this weekend, the rate was 4.70 at some banks. The best rates are amazingly enough in the typical "tourist" areas. In the Independence Square and Kretchatnek area. Volume and competition are more tense there 

[P-N]

The national TV stations hourly have the days exchange rate shown as per the National Bank of Ukraine for the USD, Euro, Polish Zlot, Russian Rubble and Sterling.  If people are silly enough to change USD now instead of a few weeks ago and lose money then that, for the exchange beuros and banks is good business.  If people are still stuck with USD now in large numbers they are better advised to keep it for as long as possible if the National Bank of Ukraine intends to keep it pegged artificailly at 5.05.  My personal opinion is that they will, (for as long as is possible anyway) as the UAH is pegged against the USD and to change it has obvious effects on big business.

If Ukraine can keep it artificially at 5.05 until November they will ride out the strom.  The USD will gather strength then for certain with Presidential elections, all bad news having already come out relating to the economy and no big shocks in the sidelines for currency pundits who will buy the dollar back in large amounts further strengthening the USD.

That said, there may be other international crisis yet to happen which may speed up or slow down the recovery of the USD outside the forecasting parameters of anyone.

All part of the money game I guess 

[Lt. Campers]

Bloomberg news over the easter weekend predicts that after some initial falls in the USD - it should recover
soon from here.
Apparently they expect a number of co-ordinated actions by the worlds central banks in the next couple
of weeks to address the ongoing loss of confidence caused by the subprime crisis and credit crunch.
High on the agenda being co-ordinated efforts to bring the oil price down, so expect it to go sub $100 USD a
barrel soon ( on its way down already due to fears of a US recession becoming a reality. )
They also expect sterling to rise against a basketfull of european currencies and analysts reckon that
currency speculators, who enjoyed a good ride on the Euro will be bailing out soon.
All due to perceptions, as people looked on the Euro as being backed by the Bundesbank as being as steady and reliable as the old deutshmark - which divorces them from reality as Eurozone countries include
basketcase economies like Italy & Spain where house prices are tumbling & of course new Eurozone entrants like Slovenia and Cyprus.
Also the Swiss Franc could tumble as well as UBS in switzerland had quite an exposure to the US subprime
market.
If oil goes down then commodity prices may tumble as well but this could be only during the medium term -
so central banks can have breathing space to lower interest rates for a couple of quarters.

[rayjazz21]

 

[SilverBullet]

Nik, You are correct. People are panicking and selling their USD too cheap. The exchange places are making brisk business. The offical exchange rate is still 5.05 and it is just to shop around. Accepting anything less is just out of convenience in my mind. It is good to see the govenrment is holding a steady course with the rate and keep Hryvnia pegged to the USD. 

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