Page 50 - UKRRptSept22

The currencies of neighbouring countries haven’t held up quite as well. The Polish zloty, Czech koruna, but above all, the Hungarian forint (still in free fall), have suffered enormously since the first days of the war. In contrast, the hryvnia has weakened only moderately against the dollar, even though the Ukrainian currency has historically managed to hold its own largely thanks to its large grain exports, which resumed only recently. In the meantime, it was mainly financial support from the West that kept the hryvnia afloat, while the NBU also had to spend a third of its gold and foreign currency reserves.
But this financial aid, which is already enormous (roughly $34 billion has been promised and $12.7 billion has been paid out already), is running out of steam. And the Ukrainian budget is feeling it already, as the massive cost of the war continues to mount.
Furthermore, as economist Maksym Samoilyuk from the Centre for Economic Strategy points out, only a third of the promised financial aid is in the form of grants. Which means Kyiv has to anticipate the repayment of these exceptional loans. (The loans are mainly from the EU, with the U.S. offering mostly grants.)
More than a third of Ukrainians working in Poland send half of their earnings to Ukraine. Almost 75% of employed Ukrainians in Poland send part of the funds to their relatives in Ukraine, of which more than 35% send more than half of their earnings, the Gremi Personal employment agency reported. At the same time, 39.1% send less than half of their earnings to Ukraine. Only 10.9% do not send anything at all. However, 14.6% of respondents moved their families to Poland, so their need for remittance to Ukraine disappeared. The centre’s analysts add that the average salary for labour specialties, which Ukrainians mainly occupy, is UAH 28,000-32,000 per month (PLN 3,500-4,000).
Ukraine will join the European currency payment zone. The National Bank has started a crucial stage of cooperation with the European Payments Council, which coordinates the activities of SEPA (Single Euro Payments Area), the NBU announced on Facebook. Ukraine will continue the dialogue and expert discussions to determine the criteria for the accession process and develop a road map and a step-by-step plan for rapid integration. Joining SEPA will be necessary for Ukraine's European integration and provide new opportunities for the Ukrainian economy. This will contribute to simplifying access to the EU market for Ukrainian businesses, the reduction of technical barriers for Ukrainian fintech to enter the EU financial services market, and cost reductions for money transfers to and from EU countries.
50 UKRAINE Country Report September 2022 www.intellinews.com