Despite the partial lifting of currency restrictions imposed by the National Bank of Ukraine at the beginning of the war, major businesses continue to face unresolved issues. In particular, companies are unable to fully settle their debts with foreign creditors and continue their development. This could lead to a wave of defaults in the corporate sector and increase borrowing costs for the government. This was stated in a column on the website «Economic Truth» by Alexander Vodoviz, the head of the office of the CEO of Metinvest Group.
The conflict in Ukraine has had a significant impact on the country’s economy, with businesses facing numerous challenges. In order to protect the value of the national currency and stabilize the financial system, the National Bank of Ukraine introduced currency restrictions in 2014. These restrictions limited the amount of foreign currency that businesses could access, making it difficult for them to settle their debts with foreign creditors.
As the conflict continued, the situation in the corporate sector became increasingly difficult. Businesses were unable to access the necessary foreign currency to pay off their debts or continue their operations, leading to a slowdown in economic growth. The partial lifting of currency restrictions in 2019 was seen as a positive step towards addressing these issues. However, the situation for businesses remains complex and unresolved.
One of the major challenges faced by businesses is the inability to fully settle their debts with foreign creditors. This has led to a buildup of debt and increased borrowing costs for businesses. As a result, many companies are struggling to stay afloat and maintain their operations. This has not only affected the businesses themselves but also had a ripple effect on the overall economy.
Moreover, the inability of businesses to fully settle their debts could lead to a wave of defaults in the corporate sector. This would have significant consequences for the stability of the financial system and the country’s economy as a whole. It could also lead to a decrease in investor confidence and further hinder the country’s economic recovery.
In addition, the unresolved issues in the corporate sector have also had an impact on the government’s borrowing costs. With businesses struggling to pay off their debts, the government may be forced to step in and provide financial support. This would increase the government’s debt burden and potentially lead to higher borrowing costs for the country.
In his column, Alexander Vodoviz highlights the urgent need for the government to address these issues and find a solution that will benefit both businesses and the overall economy. He emphasizes the importance of creating a stable and predictable business environment in order to attract foreign investment and promote economic growth.
It is essential for the Ukrainian government to continue its efforts to resolve the issues faced by businesses. This could include further lifting of currency restrictions, providing financial support to struggling companies, and implementing policies that promote a favorable business environment. By addressing these issues, the government can pave the way for economic recovery and attract much-needed foreign investment.
In conclusion, while the partial lifting of currency restrictions by the National Bank of Ukraine was a step in the right direction, there are still many challenges that businesses face. The unresolved issues could lead to a wave of defaults in the corporate sector and increase borrowing costs for the government. It is crucial for the government to address these issues and create a stable business environment in order to promote economic growth and attract foreign investment. With the right measures in place, Ukrainian businesses can overcome these challenges and contribute to the country’s economic recovery.