Ukraine cabinet takes first steps to halt coronavirus spread

Ukraine’s Cabinet of Ministers approved a resolution
on Mar. 11 ordering measures to prevent the spread of the coronavirus,
particularly the closure of educational institutions and mass events with more
than 200 attendees. The quarantine is imposed between Mar. 12 and Apr. 3. The
cabinet also ordered local governments to provide for the resolution’s fulfillment
and monitoring. It earmarked UAH 100 mln for the purchase of personal
protective supplies for the needs of ministries and state bodies, as well as
replenishing state reserves.

In Kharkiv, Ukraine’s second-largest city, the mayor’s
office decided to ñlose theatres, entertainment outlets, sporting events and
events with more than 60 attendees, but to keep schools and nurseries open. The
city “doesn’t have anyone even suspected of being stricken with this disease,
let alone ill with it,” Mayor Hennadiy Kernes wrote on his Facebook page. As of
this morning, only one Ukrainian citizen has been diagnosed in Ukraine with the
COVID-19 disease, caused by the coronavirus. Five Ukrainian citizens have been
diagnosed abroad. No fatalities of Ukrainians have occurred.

Zenon Zawada: Ukraine
won’t escape the economic effects of the COVID-19 disease. The key issue is
maintaining the stability of Ukraine’s currency, the hryvnia. Because prices
for key import items (energy commodities) are falling much faster than for export
items (grain and steel), and because Ukrainians will limit their spending on
durable goods (most of which are also imported), Ukraine’s trade balance is set
to significantly improve due to quarantine measures. This will offer strength
for the hryvnia.

On the downside, the main risk for the hryvnia
stems from financial accounts: in the event of uncertainty, Ukrainians tend to
purchase U.S. dollars, what is already affecting the forex market. In this
situation, an IMF loan deal is becoming exceptionally important to prevent the
flight of foreign capital. So it’s essential for the government to become more
decisive in taking the necessary steps to seal the deal as soon as possible and
end its reported stalling.