Who is “propping up” the Ukrainian Currency?
The Federal Reserve via “currency swaps”?
by John-Henry Hill, M.D.
Tuesday, September 9, 2014
Just WHO is propping up the UKRAINIAN CURRENCY? (It is called the Hryvnia; pronounced “greev-na” and is also referred to as UAH). (For the sake of consistency I have used FX rates from http://www.oanda.com/currency/converter/ which tends to value the Hryvnia more highly than the other five web sites I use for exchange rates. In addition, currency exchange booths, which tend to offer MORE Hryvnia per USD than the “official” FX rates found on web sites. are located all over Odessa, from supermarkets to shopping malls to large stores – NOT simply in banks, which tend to give you the worst exchange rates.)
Back in November 2013 the exchange rate (at the regular exchanges located all over Odessa) was about 1 USD = 7.9 UAH. Since the February 22, 2014 Kiev coup, its value has been steadily decreasing. Several FX web sites state the UAH fell from 1 USD = 11.4170 UAH on July 20, 2014 to 1 USD = 13.5461 UAH on August 27 2014. (At many any Odessa currency exchanges. located in many stores and malls throughout the city, on August 27, 20014 had exchange rates of 1 USD = 13.9500 USD.)
Then suddenly the fall of the Hryvnia STOPPED, as if by “magic”.
Most notable was the rise in value of the UAH from August 31, 2014 to September 1, 2014 – over this 2-day period there as a nearly vertical line in Fx curve as the UAH rose in value from 1 USD = 13.3020 UAH on August 31, 2014 to 1 USD = 12.8413 on September 1, 2014.
1.) The increase in value of the UAH from 13.5461 (8/27/2014) to 12.8413 (9/1/2014- present) represents a 5.2% increase in value of UAH per USD over a 4-day period.
2.) The increase in value of the UAH from 13.3020 (8/31/2014) to 12.8413 (9/1/2014- present) represents a 4.05% increase in value of UAH per USD over a 2-day period.
3.) Finally, there has been NO CHANGE in the USD to UAH exchange rate since September 1, 2014 to the current day, September 9, 2014. The FX curve is a FLAT HORIONTAL line at 1 USD = 12.8413 UAH. This is unheard of in the foreign exchange (FX) market, even when someone is attempting to manipulate it.
My question is: Given the near-total financial collapse of the Ukraine economy, the war in eastern Ukraine, the fact that the Kiev government has been buying up UAH with the few USDs it has left, and that the Kiev government has imposed on BANKS “currency exchange” limits (from UAH to USD) and “withdrawal limits” on USD-based bank accounts, just HOW IN HELL in the UAH increasing in value?
Is the Federal Reserve (through some third party) once again engaging in “currency swaps”, buying up UAH with US dollars? The Federal Reserve engaged in such “currency swaps” totaling hundreds of trillions of dollars from 2008 through the present, both with many foreign nations, central banks and private companies. And as former Federal Reserve Chairman Bernard Bernanke stated in testimony before Congress, these “currency swaps” are OFF-THE-BOOKS, since supposedly currencies equal in value are being exchanged.
Just curious if anyone with more knowledge about this than I has investigated this phenomenon.
John-Henry Hill, M.D.