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  • Vitaliy Kravchuk: "I would not expect further revaluation of the euro. I think the price of the euro will be lower by the end of 2010"

    27.10.2010

    Experts say the fluctuations of the euro exchange rate have only minor influence on inflation in Ukraine.

    "This [the fluctuations of the euro exchange rate] will have a limited influence on the inflation, because in the index of consumer prices foodstuff made in Ukraine accounts for 50%. This can have influence on the prices of import goods," said Dmytro Boiarchuk, head of the CASE Ukraine center for social and economic studies.

    He also told Ukrainian News that the fluctuations of the euro are not large enough to have essential influence on the pace of inflation in the country.

    "If the devaluation [of the hryvnia against the euro] were 50-60%, it could have notable influence on the inflation. [The current devaluation of the hryvnia against the euro] is not critical in comparison with other factors," said the expert.

    He also expressed a resumption that the euro will continue to strengthen against the hryvnia by the end of 2010.

    "I think the euro is likely to strengthen more [by the end of 2010]. The Eurozone performs with quite good results," said the expert.

    In the opinion of Vitalii Kravchuk, an expert of the Institute for Economic Research and Policy Consulting, the influence of the euro exchange rate on the inflation in Ukraine will be insignificant.

    "We have most of settlements with the Eurozone in the dollars. For this reason there is no proportional correlation [between the pace of the euro/hryvnia exchange rate and the inflation], although the fluctuations of the exchange rate may have influence on the prices of goods imported from Europe," he said.

    Vitalii Kravchuk expressed a presumption that the euro can devaluate insignificantly against the hryvnia by the end of 2010.

    "I would not expect further revaluation of the euro. I think the price of the euro will be lower by the end of 2010," he said.

    Oleksandr Zholud, an expert of the International Centre for Policy Studies, also expects only insignificant influence of the fluctuation of the euro exchange rate on inflation in Ukraine.

    "Half of contracts even with the Eurozone are concluded in the dollars. Therefore, there is no essential influence of the euro exchange rate on Ukrainian inflation," he said.

    Oleksandr Zholud believes devaluation of the euro against the hryvnia is the short-term perspective is possible, but the euro-hryvnia exchange rate will be approximately the same at the end of 2010.

    "I expect an insignificant devaluation of the euro against the hryvnia in the near future. As for the exchange rate at the end of this year, I believe the exchange rate will be virtually the same as today," he said.

    All experts said the euro/hryvnia exchange rate fluctuations have direct correlation with the pace of the euro/dollar exchange rate on the international market.

    As Ukrainian News earlier reported, the National Bank of Ukraine set the following exchange rate for October 27: 11.0066 UAH/EUR.

    The average purchase rate of one euro on the cash market on October 27 is UAH 10.9386, the average sale rate of one euro on the cash market is UAH 11.1346.

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    Source:  Ukrainian News Agency
    Tags: Euro
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