Polish Farmers Against the Ukrainian Hryvnia – opinion

25 April, 01:13 PM
Harvesting in the Kyiv Oblast at the beginning of August 2022 (Photo:REUTERS/Viacheslav Ratynskyi)

Harvesting in the Kyiv Oblast at the beginning of August 2022 (Photo:REUTERS/Viacheslav Ratynskyi)

The main event for the Ukrainian economy the main events took place on the Ukrainian-Polish border, where Polish farmers bargained with Brussels for a higher level of subsidies.

This week, the corporate reporting read the weather for the American markets, and therefore world markets. It was not a pleasant forecast, reflecting the economic problems that are occurring against the backdrop of rising rates. Elon Musk has stood out as always, disappointing the market, and not just because of the failed launch of his new super rocket. Previous rockets had similarly failed launches, exploding at various launch stages, thankfully not falling on Kyiv. Tesla's metrics turned out to be worse than expected once again. Well, Musk was ready for that and is launching his new hype project in the field of artificial intelligence. Of course, as with Musk's space program, his artificial intelligence will be the most advanced and seek a sense of life beyond what currently exists. Hopefully, this artificial intelligence, unlike Musk, will watch less Russian propaganda. Otherwise, Elon’s invention may turn out to be ChatGPSkabeeva.

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As a result of the mixed data, the S&P500 index lost about 20 points for the week and will open at 4,129 points. Recession-induced worries, flavored by corporate statistics, put pleasant pressure on the oil price.

Oil prices into decline again, despite the best efforts of the Saudi prince. Closer to Friday, it was already trading at $82 per barrel of Brent. Once again, people who predicted the rapid collapse of the Chinese economy proved short-sighted. This economy has been growing non-stop for 40 years. Forecasters have been predicting its rapid collapse for the last 20 years. "A bit more," and it will happen. But the latest data showed that China's GDP grew by 4.5%, higher than market expectations. Abandoning the zero-tolerance policy for Covid has benefited China. The seers of the Chinese economic crisis will guess if it will be sooner or later. And it doesn't matter what causes it. Whether it's the property market, local councils in debt, or maybe a Chinese black swan. Then we will find a new economic guru who can get his five minutes of fame even if he guesses wrong 101 times.

The main event for the Ukrainian economy the main events took place on the Ukrainian-Polish border, where Polish farmers bargained with Brussels for a higher level of subsidies, demonstrating a demo version of Ukraine's future with European integration. This frightened Ukrainian farmers and inspired Ukrainian currency speculators, who have become completely bored in the last month, not seeing a reason for volatility in the cash currency market. Well, the greed of Polish farmers helped for a while, allowing room for speculation on the topic of not receiving a certain share of foreign exchange earnings. As a result, the black market exchange rate has deviated a little from the official exchange rate and now stands at 38.1-38.2 hryvnias per dollar.

However, the problem was successfully resolved by Friday, and everyone was satisfied. Polish farmers received partial moral compensation for their damages from the fall in the wheat price, and officials from Brussels avoided having a brief headache before the weekend.  The National Bank has not seen a significant risk for the hryvnia in what is happening, allowing even a minor liberalization of the foreign exchange market. Since April 21, the NBU allowed banks to sell on the cash currency market, not exactly just what the banks bought from the population (or not at all), but 120% of this amount. The National Bank also made it possible for e-residents (after paying taxes in Ukraine) to transfer funds received from non-residents to accounts in Ukrainian banks to their accounts abroad.

Ukrainian farmers also breathed a sigh of relief after Brussels reached an agreement with the agro lobby. The five bordering countries have traditionally been the sales market for Ukrainian grain, and the main priority was safeguarding the opportunity for transit. Now the Black Sea and the continuation of the grain agreement will be the concentration of problems again. It is good that the harvest has already been almost exported, and now the opportunities for blackmail from Russia are limited. What is essential is keeping in mind the upcoming Turkish elections, when Erdogan may not be interested in making money from Ukrainian grain. On the domestic debt market, non-residents continue to hunt for profitability. This has already flattened the yield curve by actively buying long, which promises more yield, hence more potential coupon withdrawals in absolute terms. You can no longer buy OVDP with a yield below 25-26%. In the best case, the buyer can expect 23% of the profit on long bonds maturing sometime in 2025.

P. S. Success is liking yourself, liking what you do, and liking how you do it.

Maya Angelou

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