during a tour of the Lugansk mining region in southeastern Ukraine
June 26, 2008. Ukraine wants to privatise some of its mines to reform
a sector that is vital for domestic energy and to its booming steel industry
but marred by ageing infrastructure, local news agencies reported on Thursday.
REUTERS/Alexander Prokopenko/Pool (UKRAINE)
Ukrainians have queued up in droves to close down their accounts and change hryvnias into dollars, taking billions of dollars out of the banks. There has been a sharp increase reported in consumer purchases of electronic goods and gold amid expectations that worse is to come. The central bank also has reacted by limiting withdrawals from deposit accounts.
Ukraine's financial crisis has hit all too close to home. For an example of the kind of financial panic that has hit Ukraine is after Prominvestbank, a major lender where many coal mines have their accounts, was forced into receivership in October amid a deep financial crisis in one of Europe's worst-hit countries. There are plenty of miner salaries in account of the bank that have been frozen since then. Thousands of miners are still waiting for their salaries as they working for free.
The crisis does not just hit Prominvestbank. The exposure of many banks to foreign loans meant the global financial crisis hit particularly hard and the political infighting has delayed further government action to stabilise the banking sector. The International ratings agencies Fitch and Moodys have downgraded several Ukrainian banks in recent weeks as a result of the crisis.
As Standard and Poor's, another rating agency, spoke of low confidence in Ukraine's financial and monetary institutions and said this would in turn increase inflation and the risks for the real economy.
Ukraine's parliament on Friday approved laws to set up a stabilisation fund to help ailing banks and companies and the International Monetary Fund has offered a 16.5-billion dollar (13-billion euro) loan.
ETFs/Stocks :
- Claymore/BNY Mellon Frontier Markets ETF (FRN) 14.39 +0.62 (4.49%)
Sources :
- Bank crisis hits hard in Ukraine's coal belt, November 5 04:25 AM EST
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