Can the Ukraine Economy be 'De-dollarised'?

Important New Banking Rules in Ukraine

 

Individuals

Commencing 28th November 2012 – Individuals (Residents and Non-Residents)
will be allowed to receive a maximum equivalent of UAH 150,000 per month (approx. $18200) when transferred from another country into Ukraine. Any amount received over this limit will be automatically converted into UAH by their bank. This applies to all major currencies – EUR, GBP etc.  This is a National Bank of Ukraine ruling.

 

Companies

Since 19th November 2012 – 50% of ALL proceeds in foreign currency received in Ukraine
from export operations will automatically be sold and converted to UAH within ONE Banking day upon receipt by a Ukrainian Bank. The terms for settlement of cross border transactions has also been reduced from 180 days to 90 days.

This is not good for citizens or businesses in Ukraine.

It is clearly an attempt by the NBU and the Government to take control of the 'dollar economy' in Ukraine. For many many years people in Ukraine have made all arrangements in USD and recently in EURO. Citizens just do not feel comfortable dealing in their own currency the UAH.

Will people start dealing in UAH only? I very much doubt it.

The implications of these changes could be:

* Forcing even MORE money into the black economy (which is already one of the largest in   

   Europe).

* More 'offshore' deals taking place.

The UAH is expected to devalue further towards the end of 2012.

Foreign companies and most individuals will choose not to invest in Ukraine.

This is bad news.

Jaguar and Land Rover to be built in CHINA from 2014

Who would have thought it? Who would have thought that one day classic icon brands like Jaguar and Land Rover would be manufactured in CHINA.

This week news hit the UK that the owners of JLR (Jaguar Land Rover), TATA an Indian owned group have formed an agreement with the Chinese car manufacturer Chery to start making Jags and Landy's in China from 2014.

As many people have declared that just about everything will soon be made in China, perhaps they never expected this to include brands like Land Rover. British people are already forecasting a complete end to any manufacturing or assembly of these famous brands in the UK.

The success of Jaguar and Land Rover has for many years been due to the image of these cars being built to a high quality by British firms in the UK. Both brands have enjoyed an increase in sales recently.

China has now overtaken the US has the largest car market in the world, so maybe the move by TATA group is logical. Oh...by the way let's not forget the cheaper labour and manufacturing costs in China.

JLR company profits can only increase.

See the story here in the Daily Mail: Land Rover Story

Remembrance Sunday 11 November 2012

Today is Remembrance Sunday. Where the UK and Commonwealth countries remember all those who lost their lives as a result of war. A simple poppy (paper copy) is sold in the weeks leading up to the 11th November all over the UK and Commonwealth. (see image below). Money raised from the sale of these poppies is donated to the Royal British Legion Society.

Text below copied from Wikipedia:
In the United Kingdom, although two minutes of silence are observed on 11 November itself, the main observance is on the second Sunday of November,Remembrance Sunday. Ceremonies are held at local war memorials, usually organized by local branches of the Royal British Legion, an association for ex-servicemen. Typically, poppy wreaths are laid by representatives of the Crown, the armed forces, and local civic leaders, as well as by local organizations including ex-servicemen organizations, cadet forces, the Scouts, Guides, Boys' Brigade, St John Ambulance and the Salvation Army. The start and end of the silence is often also marked by the firing of a cannon. A minute's or two minutes' silence is also frequently incorporated into church services. Further wreath-laying ceremonies are observed at most war memorials across the UK at 11 a.m. on the 11th of November, led by the Royal British Legion. The beginning and end of the two minutes' silence is often marked in large towns and cities by the firing of ceremonial cannon and many employers and businesses invite their staff and customers to observe the two minutes' silence at 11:00 a.m.