Wednesday, February 25, 2009

why can't the dollar stop growing?

okay, so it's not so much that the dollar is growing as that the "hryvnia" (ukraine's currency) is in a death spiral. the dollar has reached its all-time high, or in other words, the hryvnia has hit an all time low. (9.26 grn. to $1) bloomberg has this article on the situation here. some highlights are below:
Ukraine’s hryvnia tumbled, closing at a record low against the dollar, after Moody’s Investors Service said it may cut the country’s rating because political infighting is hampering efforts to avert a financial crisis.
The hyrvnia has lost more than 50 percent against the dollar in the past six months as reduced demand for exports and a lack of foreign credit causes Ukraine’s first economic contraction in a decade.

Inflation soared to 22.3 percent last month, the highest level in Europe
for the foreigners here whose accounts are in dollars (myself included), this makes things comparitively cheaper than a few months back when it was still 5:1. but, though it's almost hard to imagine i'm saying this, i wish the dollar would go back down some, cause if it keeps growing, ukraine's economy might just free fall off the precarious cliff it's teetering on.

NOTE: the following day bloomberg updated this article, and outlined the newly dropped default rating. the new rating implies:
a 69.6 percent chance Ukraine will default in the next two years and 91.8 percent in the next five years.

3 comments:

Anonymous said...

Wow that's crazy!! I had no idea that was going on!

benjamin morrison said...

yeah, check out the follow-up article i added on to this post today. 92% chance of international debt default doesn't look pretty.

Anya said...

Yikes.