Who is “propping up” the Ukrainian Currency? – The Federal Reserve via “currency swaps”? – PART I

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.

retired physician

Web: http://JohnHenryHill.Wordpress.com


  1. […] setembro, especulou-se que o Fed estava sustentando a Hryvnia, moeda nacional da […]

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    1. I recently spoke with two (2) people who CONFIRMED what I wrote about the “currency swaps” between the Federal Reserve and the Ukraine central bank. To be honest, I was 100% POSITIVE that such “currency swaps” were taking place when I wrote my first essay on the subject. But WHERE ELSE could the Kiev central bank be obtaining all these U.S. dollars?

      They both read my second essay “Who is “propping up” the Ukrainian Currency – Hryvnia (UAH) – PART II” (dated March 11, 2015) and soon contacted me, both stating that I was almost 100% CORRECT. The essay is at:

      The Federal Reserve is doing these “currency swaps” to keep the Ukraine central bank from bankruptcy (in terms of U.S. dollars) and to keep the Hryvnia from losing ALL of its value. The first person is a senior executive at one of the BIG INVESTMENT BANKS in New York City (NYC). This person stated that the “currency swaps” are taking place directly (FED to Ukraine) and indirectly through intermediary central banks in Europe. He said he also believes that the Federal Reserve is financing the purchase of Ukraine BONDS by the of BIG BANKS in NYC. The second person works at the U.S. State Dept at a senior level. His words were that “I hit the nail on the head!” That not only “currency swaps” taking place via the Federal Reserve, but the U.S. government was sending U.S. dollars directly to the Ukraine central bank. The great fear is that if the Hryvnia lost too much of its “purchasing power” (especially around 2/27/2015 – see he GRAPH in my essay “Who is “propping up” the Ukrainian Currency – Hryvnia (UAH) – PART II” , then there might be a REPEAT of the Maidan coup d’etat, but this time it would be Poroshenko, Yatsenyuk and others in the new pro-U.S. Kiev regime that would be thrown out of power!

      Today (4/30/2015) the “official exchange rate” is 21.1000 Hryvnia per U.S. dollar, but the “street exchange rate” is around 22.5. HOW can this be happening when the Ukraine economy is nearly non-existent and Ukraine stills owes Russia some $5 Billion USD for past natural gas deliveries? Further, the Kiev regime is “cutting its own economic throat” by blockading trade with Crimea (which used to get most of its imports from mainland Ukraine), as well as Russia – formerly Ukraine’s largest trading partner. Crimea is nearly an island with many ports and has easily found new sources for these products. Russia is doing the same, plus investors are quickly building new factories to produce the same products it used to import from Ukraine – including CHOCOLATE and other candies (which is Ukraine “President” Poroshenko’s MAIN BUSINESS. Poroshenko owns “Roshen” (the largest chocolate and candy company in Ukraine) – which is how he got his nickname of “The Chocolate King” and Russia was his primary market.

      In short, the additional sanctions imposed by the Kiev regime on its own (in addition to U.S. and EU sanctions) are severely hurting the EU economies, but are literally KILLING OFF what was left of the Ukraine economy! The Kiev regime is driving away its best customers (Russia and Crimea) and will probably NOT get them back as customers when the crisis is resolved. Even worse, it has imposed “currency controls” (especially on U.S. dollars) which DISCOURAGE investment. REAL EXAMPLE (of “rules” imposed by the post-coup Ukraine central bank): I went to the central office of a VERY LARGE Ukrainian bank and tried to deposit over $60,000 USD, with similar future deposits to come. I am a co-owner of a U.S.-based software company and we wanted to EXPAND our office in Ukraine (thus hiring more Ukrainian programmers – who happen to be superb!). I was told that the bank would charge a THREE (3) percent “deposit fee” (taken from the deposit); that withdrawals would be limited to $550 USD per day and require a 1.5 percent “withdrawal fee” (on each withdrawal). Now, HOW can ANY business operate under such conditions? When we first opened our Ukraine office a number of years ago, we deposited over $100,000 USD into a Ukrainian bank (with NO “fees”); and deposits and withdrawals of $70,000 USD per week were the norm. (And our Ukrainian employees receive salaries FAR ABOVE the typical Ukrainian programmer.) The Kiev regime and Ukraine central bank’s new “rules” not only killed off the idea of our expansion here, but may force us to REDUCE the number of existing staff. Hell, we spend FAR MORE $2,750 USD ($550 per day x 5 days) for salaries – our office supplies alone cost more than $550 per week!

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