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Igor Mazepa: the strengthening hryvnia – is it all that good?


Investment banker Igor Mazepa, the CEO of Concorde Capital, discusses the hryvnia’s strengthening

Investment banker Igor Mazepa, the founder and CEO of Concorde Capital, commented for The Page media resource on the hryvnia’s strengthening

The demand of non-residents for our local bonds is the main reason for the hryvnia’s strengthening that we have seen since the fall of 2019. Yet as a rule, non-residents are financial speculators, not strategic and systemic international investors. Therefore, both in the short and long term, this situation can pose risks for the Ukrainian economy, said Igor Mazepa.

The strengthening hryvnia hurts exporters, in the first place, but also domestic producers. After all, they are forced to halt their factories as a result, Igor Mazepa said.

My partner and I built a factory to produce corrugated cardboard and planned to launch it in 2019 – said Igor Mazepa. We initially proceeded from the exchange rate being at UAH 28/USD. Under that condition, no one would have imported cardboard to Ukraine since it would have been more expensive than what’s produced in Ukraine. Now the exchange rate is at UAH 24/USD. That is, the hryvnia – and the domestic price in the USD equivalent, accordingly – have appreciated 15% already. For our competitors in Poland and Hungary, our market became more attractive and they began to export their products here. As a result, we haven’t launched the factory yet. It is sitting idle. And the Khmelnytska region didn't gain 300 jobs as a result.

These were the comments of investment banker Igor Mazepa, the founder and CEO of Concorde Capital, on the pluses and minuses of the hryvnia's strengthening.

You may see Igor Mazepa’s video comments here