Ukrainian currency lost the most value in February, survey finds

The nearly two million refugees ukrainians who managed to leave the country in the midst of russian invasionaccording to data from the United Nations High Commissioner for Refugees (UNHCR), will have one more challenge to settle in their new destinations.

The few who managed to take some cash will have to deal with the devaluation of the Ukrainian hryvnia, the currency that lost the most value in February 2022: a drop of 6.6% against the dollaraccording to a study by the rating agency Austin Rating prepared at the request of the CNN Brasil Business.

This basically means that those who have left the country will find it more difficult to exchange money to start their lives over in their new destination.

In the main destinations, the currency used is the eurowhich, even before the hryvnia’s devaluation, was already much more valued than the Ukrainian currency.

However, with little global relevance, the devaluation of the Ukrainian currency generates few external impacts, since, in addition to not being part of the European Union and not the euro zoneUkraine is not a member of the North Atlantic Treaty Organization (nato).

The study compared the value of the coins on the last day of the previous month (January) with the last day of the month in which the study was closed (February).

Alex Agostini, chief economist at Austin Rating, says that “what is expected of these immigrants is governmental support, starting with social support. They need to recover, and then the economic recovery can begin.”

“The whole situation was very unexpected, it is likely that most of them had no money. And, whoever had something, probably didn’t have time to go to the bank, make a withdrawal, transfer, nothing. It was not possible to take any preventive measures, convert to euro, nothing”, he evaluates.

Other countries involved in the conflict and the affected region are also among the nations with the most devalued currency in the period. The ruble, currency Russialost 6.4% of its value and had the third biggest drop.

Belarusan ally of the Kremlin and considered the last dictatorship in Europe, saw the Belarusian ruble lose 5.9% of its value, becoming the fourth most undervalued.

It was the same level reached by the tenge, Kazakhstan. Close behind appears the lari, from Georgia, devalued by 3.8%. For Agostini, the phenomenon has to do with the reversal of expectations.

“There is a great contagion from the conflict to other economies, because the war directly impacts trade. What was believed before is that, with the war power it has, Russia would achieve greater persuasiveness and face less resistance, which did not happen”, says the economist.

“Early on, the ruble suffered a strong devaluation, and Russia raised the interest rate from 9.5% to 20% in just one day.”

International projections indicate that the number of Ukrainian refugees could reach five million, which would represent about 12% of Ukraine’s population.

If this data is confirmed, the country would be responsible for second largest refugee diaspora, surpassing the four million Venezuelans but trailing the 6.7 million Syrians, according to UNHCR data. The information is from the 2021 report.