Isn't this going to lead to inflation of the hryvnia?
It will still be a manged exchange rate and they will target inflation as they move forward. I am not a financial expert, even less of one in wartime economies, but their plan to end the fixed rate seems measured, reasonable and straightforward.
Can't manage without sufficient foreign currency reserves. You don't depeg during a war because of "economic normalization" when your economy has collapsed by like 30% in the past year and you've bled half of your able-bodied men to either the frontline or the border.
This is bad, right? Not an economist, but it seems like this would be bad...
Yes, very bad unless the US keeps throwing USD at Ukraine to keep their foreign currency reserves in decent shape.
Isn't this going to lead to inflation of the hryvnia?
It will still be a manged exchange rate and they will target inflation as they move forward. I am not a financial expert, even less of one in wartime economies, but their plan to end the fixed rate seems measured, reasonable and straightforward.
Can't manage without sufficient foreign currency reserves. You don't depeg during a war because of "economic normalization" when your economy has collapsed by like 30% in the past year and you've bled half of your able-bodied men to either the frontline or the border.