Ukraine’s hryvnia plunge has accelerated in recent days, falling to a new low of 0.03 versus the dollar. Outracing the ruble to the bottom, it has lost over half its value in February alone.
The situation has gotten so bad that residents went on a shopping binge and Kiev introduced rationing of goods. On the street, people are buying up dollars at any chance they get, but some have stopped simply because they ran out of money.
In an effort to stem what it says is panic-driven selling, the government had banned banks from purchasing foreign currencies for three days. Today, it reversed the ban, allowing banks to spend up to 0.5% of their capital.
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The losses continue a streak that began last year, even outpacing the losses of bitcoin (BTC/USD)–dubbed last year’s worst performing currency–over the same period. Bitcoin’s value has actually skyrocketed against the hryvnia, following a similar pattern as during the climax of the ruble’s fall.
In theory, bitcoin can prove a useful hedge, and even serve as a means to bypass any future foreign currency controls–the bitcoins can be simply converted back into the desired denomination of fiat. However, there are no easy ways of exchanging the hryvnia for bitcoin, the major fiat-based markets being limited to no more than a dozen choices.
There are also options to pay by credit card, which in theory, can take care of the foreign exchange issue. Most of these services, however, are limited to but a few countries and currencies.