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    Panic, debt and inflation: how the expectation of a war with Russia exacerbates the situation in Ukraine

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    Even while expectations and a possible escalation scenario have painful consequences for Ukraine as a whole

    Experts say the situation is difficult, but not critical / Photo: UNIAN, Collage: Today

    The devaluation of the hryvnia, debts, the exit of investors from Ukraine, inflation of the hryvnia – and this is not the whole list of not only possible, but already half of the real consequences of the expectation of Russia’s invasion of Ukraine. We note, for now, only a possible escalation scenario, but already so painful for Ukrainians.

    Today, together with experts, we examined how real the mentioned horrors of the economy are, and how ordinary Ukrainians react to the all-round spread of such fears.

    Panic in the media

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    In an exclusive comment, financial analyst, economist Alexey Luponosov noted that the active inflating of the topic of Russia’s attack on Ukraine really harms our state.

    He believes that Russian special services are behind this, which inspire panic in the US and European media, which, in turn, should not have succumbed to these sentiments, because they are our partners.

    “American and European partners should keep their mouths open as they ruin our economy and pour water on Putin’s mill,” says Alexei Luponosov.

    The expert also believes that Russia today has neither the strength nor the means to invade any of the countries of Europe or Asia.

    Economist and financial analyst of the same opinion Alexey Kushch. In a comment to “Today” he noted that this is indeed a powerful system-organized attack aimed at forcing the country to take certain actions.

    Consequences for Ukraine

    According to Aleksey Lopunov, the expectations that Russia will attack Ukraine each time excite the society and sow negative moods. Ukrainians start “clean” store shelves, buying buckwheat, peas, sugar, and other products with a long shelf life.

    “I don’t understand why do this, if Putin attacks, there will be no buckwheat? In this situation, all this (claims about the attack) is very harmful to the economy of Ukraine,” the expert says.

    Among other consequences, which have a negative impact on the economy

    • Ukrainians massively begin withdraw money from their deposits, convert them into foreign currency and keep them in cash. So withdrawing money from a bank has already become problematic;
    • investors stop investing in Ukraine, they take away all their assets and actually run away, investment outflows increase against the backdrop of intimidation.

    But economist Aleksey Kushch says that there is nothing with the economy in the short term won’t happen, but if this uncertainty builds up within three to four months, then the closure of the external and domestic debt markets may lead to a threat default.

    “But I don’t think it can happen,” he added.

    Is it a real threat?

    Alexey Kushch believes that this issue should be viewed through the prism of the behavior of external and internal markets. If the threat were real, then mass psychosis was observed in the domestic market.

    “Business would frantically convert money into cash or withdraw money from banks, and you and I observed a colossal outflow of capital from Ukraine,” the expert says.

    All this would be reflected in exchange rate. However, the situation would not be the same as it is now, but much worse. Consider, for example, 2014, when there was a huge outflow of capital. Currently, this trend is not observed.

    but external factor works, nervousness intensifies.

    “All the nervousness is observed mainly in the segment of Western speculators, who really start to get nervous when they read publications about the war with Russia every day. Here again, an interesting observation: these quotes, which lead to the fall of Ukrainian Eurobonds, are swayed due to small transactions,” Oleksiy notes. Kusch.

    If these were real panic expectations, we would see how the largest Western venture funds dump Ukrainian Eurobonds in batches of millions or even billions of dollars. But the great players are such bonds now no sell. All this hysteria works only on local investors who have invested in Ukrainian Eurobonds.

    How will the exit of investors harm Ukraine?

    Oleksiy Kushch notes that if the Ukrainian economy were integrated into the global financial system, the exit of investors would deal a significant blow to the economy.

    “But we have practically no foreign direct investment, respectively: if you don’t live, then you won’t die. A negative scenario may be for the government securities market, it is very difficult for the Ministry of Finance to raise money in the domestic market under government bonds,” the expert says.

    Russian hacker attack

    On the night of January 13-14, hackers launched a massive cyberattack on government websites. Many sites have temporarily stopped their work.

    By the way, even the State Inspectorate for Nuclear Regulation of Ukraine made an alarming statement that its website was also subjected to a large-scale hacker attack.

    On the morning of January 14, the following sites did not work:

    • Cabinet;
    • Ministry of Foreign Affairs of Ukraine;
    • State Emergency Service of Ukraine,
    • Ministry of Education of Ukraine;
    • Ministry of Sports;
    • Ministry of Energy;
    • Ministry of Agrarian Policy;
    • Actions.

    The Ministry of Culture said that Russia was involved in hacker attacks – in this way, the aggressor country wants to sow chaos among Ukrainians and destabilize the situation.

    If hackers had stolen the data of Ukrainians from the Diya program this night, it would have been a powerful attack in the history of Ukraine. Using this information, attackers could blackmail people and even transfer property to other people.

    We have already written how Gazprom is exacerbating the gas crisis in the EU, and told what will happen to the dollar in the event of a real Russian invasion of Ukraine.

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    Source From: Segodnya

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