Ukranian currency slides to new low as tensions spike

26th August 2014, Comments 0 comments

The Ukrainian currency slid to a new record low on Tuesday as tensions soared between Kiev and Moscow over the four-month conflict in the east.

The hryvnia hit an all-time low of 13.65 to the dollar, according to the National Bank of Ukraine, a slide of around 40 percent this year.

Against the euro it was at 18.03, the bank said.

In a bid to shore up the ailing currency, the bank last week ordered Ukrainian companies to sell all of their foreign currency income on the domestic market, from 50 percent previously.

"Despite these measures, the hryvnia continues to decline," the bank said in a statement.

The country's economy is on the brink of collapse after being mired in recession for more than two years.

Its weak growth has also been hit by Kiev's military campaign in the east, where it is struggling to overcome a separatist uprising by pro-Moscow rebels.

Fitch rating agency on Friday downgraded its sovereign credit rating by one notch to CCC, taking it closer to default.

Ukraine's economy minister also resigned last week in the face of feuding within the government on how to turn around the country's finances.

The International Monetary Fund has warned Ukraine's economy could shrink by 6.5 percent this year, and has agreed to provide $17 billion (13 billion euros) of aid in several instalments to help Kiev through the crisis.

© 2014 AFP

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