Policymakers in Ukraine devalued the hryvnia this week and asked creditors to suspend debt repayments, which will free up funds for the government, but will add to inflation and increase balance sheet problems elsewhere in the economy. Meanwhile, reports suggested that Russia is setting out a proposal for an updated fiscal rule, one consequence of which is that the ruble may weaken. Finally, natural gas began flowing through the Nordstream I pipeline again this week, raising hopes that an immediate energy crisis in CEE has been averted.
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