Razumkov Centre: Is expensive dollar bad for Ukraine?

2022-09-01 | Expert publications

By Vasyl Yurchyshyn. After two decades of fluctuations, US dollar finally reached parity with euro. Of course, the situation with the dollar that equalled the euro will have an impact on global financial, currency, and economic processes in the medium and long term, will lead to redistribution of flows of goods and capital, and with it, spheres of influence (not only economic but also political).

The most important factors in the “balancing” of the value of the main world currencies include the increase in the base interest rate by the US Federal Reserve, better economic dynamics and lower unemployment in the US compared to the EU. Along with this, financial systems are quite sensitive not only to monetary policy instruments (interest rates, reserve requirements, open market operations, etc.) but also to political troubles and contradictions. Therefore, the demonstrated weakness of the EU in the Ukrainian issue (inability to quickly and efficiently resolve the problem of military aid to a European country fighting for freedom and independence) also could not but affect the financial strength of the European Union.

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