Ukrainian Currency Collapse in a Basket of Goods

• New Europe Investor
• February 20, 2015

The Ukraine is in a state of turmoil. It experienced the annexation of Crimea last year at the hands of Russia the revolution. It is locked into an ongoing conflict with Russian separatists in the east. The economy contracted 8% last year, with a further 5.5% expected in 2015. Inflation is currently running at 25%. Even the central bank says this will not stabilise in 2015.

Foreign currency reserves have been all but depleted in trying to keep the gas flowing, and to also prop up the collapsing currency. These efforts were recently halted.

On February 21^st 2014, the Ukrainian hryvnia stood at 12.23 to the euro. On 20^th February 2015, it closed at 31.60, hitting yet another record low.

It represents a fall in the hryvnia to the euro of 61.3% in only 12 months. This also takes into account a bad year for the euro, which is going through its own crisis. It has led to the euro falling significantly to the dollar.

Foreign Currency

Anyone paying a visit to the country will know that euros, dollars and for that, any foreign currency are much in demand. Currency booths offer significantly better rates than official levels, such is the demand for foreign currency.

New Europe Investor recently paid a visit to Kiev. In the queue at the at the airport’s currency booth, a man offered his own exchange services, where he offer significantly better rates.

New Europe Investor looks at 15 everyday products and services in the Ukrainian capital, Kiev.

We have retrieved an average cost of these products and services in the local currency, the hryvnia from Expatistan.com. We then look at their equivalent value in euros, compared to what the price would have been exactly one year ago.

The table merely highlights the fall in the value of the hryvnia, by showing common items in euros, and does not look at the product prices in hryvnia last year.

Product/Service	Price in hryvnia ₴ Feb 2015	Equiv euros € 20th Feb 2015	Equiv euros € 21th Feb 2014
12 Eggs	23	73 cents	€1.88
1kg of Apples	12	38 cents	98 cents
1 Litre of Milk	11	35 cents	90 cents
Boneless Chicken Brest	25	79 cents	€2.04
2 kg of Potatoes	5	16 cents	41 cents
Domestic Beer in Sepermarket	8	25 cents	65.41
Metro Ticket	4	13 cents	33 cents
Monthly Public Transport Ticket	154	€4.87	€12.59
8km Taxi Journey	69	€2.18	€5.64
2 Theatre Tickets (Best Seats)	800	€25.31	€65.41
Cocktail in Downtown Club	58	€1.86	€4.74
Domestic Beer in Neighbourhood Pub	22	70 cents	€1.80
Cappuccino in Expat Area	25	79 cents	€2.04
Big Mac Meal at McDonalds	39	€1.23	€3.18
Lunchtime Menu in Business District	58	€1.84	€4.74