Ukraine Reforms Watch (December 8, 2014)

On November 20, five Ukrainian political parties, including “Block of Petro Poroshenko”, “Samopomich”, “Batkivshyna”, “Radical party of Oleg Lyashko” and “Narodniy Front”, together comprising more than 60% of seats in the parliament, signed a final version of the Coalition Agreement. The document contained an outline of 17 key reforms that the new government and the parliament will have to implement. Overall, we believe that the proposed reforms definitely represent a step in the right direction, and will positively impact the Ukrainian economy as a whole. We present a short overview of the key planned reforms below. Furthermore, we will issue an update on the reforms’ implementation on a monthly basis. 

Ukrainian parliament approves a progressive government (December 2, 2014)

The Ukrainian parliament just approved the new Cabinet of Ministers, most importantly the Ministry of Finance and the Ministry of Economic Development and Trade will be headed by Western-educated foreigners with strong investment backgrounds.  We believe that this is a strong signal that the current parliament is ready to go through with the necessary reforms and take the European path. We thus view this as extremely positive for the Ukrainian economy as a whole.

UAH: Reviving after the Storm (November 24, 2014)

The UAH currency has declined by 45% YTD vs. USD due to political instability, imbalanced external sector, conflict in Eastern Ukraine and lack of certainty. While we think it is highly unlikely that hryvnia will recoup all its losses, we also believe that the USD/UAH exchange rate has “overshot” a balanced level and should return to a range of 14.5-15 along with new tranches of international aid and stabilization of conditions in the East of Ukraine.