The Ukrainian hryvnia has been collapsing for months, but it sank an additional 47% against the US dollar Thursday, according to FactSet data, after the National Bank of Ukraine took steps to stave off financial collapse. The central bank hiked interest rates and halted foreign currency auctions, which had been used to stabilize the hryvnia’s exchange rate. Per Reuters:
With the hryvnia declining even before Thursday’s drop, and Ukraine’s foreign exchange reserves falling to $6.4 billion—barely enough to cover five weeks of imports—the bank has few ways to revive an economy on the brink of bankruptcy.
The former Soviet republic wants the visiting International Monetary Fund to help fill a roughly $15-billion hole in funding. But escalating violence in the country is complicating talks with donors, as the fighting weighs heavily on the country’s economy.