Political instability can affect exchange rate - Hontareva

Unstable political situation in the country can become a breeding ground for excessive demand for foreign currency.

Governor of the National Bank of Ukraine Valeriya Hontareva told lawmakers in the Rada, Ukrinform reports.

"Political instability creates uncertainty about the future of the country and can become a breeding ground for an excessive demand for foreign currency. Resonating news from the political arena is always reflected in the dynamics in financial markets, and the current situation is no exception. For example, investors in the Ukrainian sovereign Eurobonds have begun shedding state debt, fearing the worsening of a short-term solvency of Ukraine," Hontareva said.

She also explained that in addition to political statements made in the nation the currency exchange rate is affected by a number of other factors, for instance, devaluation of the hryvnia against the U.S. dollar since the beginning of 2016 was caused by imbalances in supply and demand in the currency market.

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