Ukraine: the invasion of capital

Imagen tomada de Translator without Borders.

Michael Roberts Blog

Last week, Ukraine’s foreign private creditors agreed to the country’s request for a two-year freeze on payments on about $20bn of foreign debt.  This would enable Ukraine to avoid defaulting on its overseas borrowings.  Unlike other ‘emerging economies’ in debt distress, it seems that foreign bondholders are happy to help Ukraine out – if only for two years.  The move will save Ukraine $6bn over the period, helping to reduce pressure on central bank reserves, which slid by 28 per cent year-to-date, despite significant foreign aid.

Ukraine’s economy is, not surprisingly, in a desperate state. Real GDP is projected to decline by more than 30% in 2022 and the unemployment rate is at 35% (Constantinescu et al. 2022, Blinov and Djankov 2022, National Bank of Ukraine 2022). “We are grateful for the private sector support of our proposal in such terrible times for our country,” responded Yuriy Butsa, Ukraine’s deputy…

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The Fed, interest rates and stagflation

“The economy has made progress toward employment and inflation goals and if progress continues broadly as expected, a moderation in the pace of asset purchases may soon be warranted”, the US Federal Reserve officials said in their September monetary policy statement. The Fed also signalled interest-rate increases may follow more quickly than expected, with 9 […]

The Fed, interest rates and stagflation