The NBU banking on borrowings / Photo from UNIAN
Cooperation with donors will ensure the flow of foreign currency into Ukraine.
The National Bank of Ukraine (NBU) says financing the budget deficit in Ukraine through the emission of hryvnias will be an irresponsible step, which will translate into the weakening of the national currency and rapid price hikes.
"Calls are heard today that the Central Bank could finance the budget by issuing hryvnias. It's simple, but irresponsible. Our country has the experience of the 90s, 2008 and 2014. At that time, the emission led only to trouble. The National Bank is against letting the 'inflation and devaluation' genie out of the bottle again. After all, the hryvnia will rapidly weaken because of the issue, and prices will soar," Deputy Governor at the NBU Dmytro Solohub said in a video address posted on the NBU's Facebook page.
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According to him, the state should help those who have temporarily lost their jobs over the coronavirus quarantine, but irresponsible steps could make them suffer more.
He says the government could not just "switch on the money printing press," but it could fill the gap due to borrowings.
"Our country has positive experience in cooperation with international partners. Now we are at the final stage of negotiations with the IMF [International Monetary Fund] and other donors. This cooperation will ensure the flow of foreign currency into Ukraine. The funds will cover the budget deficit," he added.