Ukraine: hryvnia’s stability masks underlying weakness

At first sight, the stability of the hryvnia over the past few months suggests that Ukraine has been relatively insulated from the sharp sell-off in other emerging markets. But a closer look reveals that currency stability has been achieved thanks to massive support from the central bank, which has driven foreign exchange reserves to a new low. A decent harvest should support GDP growth in the second half of the year, but the Ukrainian economy remains extremely fragile.