The Ukrainian government is under pressure from the IMF ahead of talks on a new loan package. The fund is demanding a controlled depreciation of the hryvnia, Bloomberg reported, citing sources.
According to sources familiar with the matter, the IMF is touting the benefits of a controlled devaluation of the hryvnia as a step that could help shore up Ukraine’s strained finances by boosting budget revenues denominated in local currency.
However, officials at the National Bank of Ukraine are resisting such a move, citing risks to inflation and public sentiment.
The economic policy differences pose a potential threat as Ukraine seeks a new loan package from the Washington-based lender, given that its war with Russia is now in its fourth year.
It is worth noting that Ukraine received most of the $15.6 billion under the IMF program agreed in 2023, and the two sides are currently negotiating a new package that could amount to $8 billion.
Recall that recently the price per troy ounce exceeded $4,300, approaching an absolute historical maximum.
This is a very serious increase, which emphasizes the deep structural distrust in traditional financial instruments and the huge demand for assets that are not physically exposed to the risk of default or rapid devaluation.
