Ukraine Faces Backlash as Devaluation Ravages Foreign-Currency Borrowers

By Daryna Krasnolutska and Daria Marchak Jun 18, 2014 7:33 AM ET

As central Kiev burned amid deadly street protests in February, Ukraine’s currency dived and Alex Bukovetskiy stopped paying his dollar-based mortgage.

The 41-year-old joined hundreds of angry borrowers at parliament last week to demand the authorities provide relief after the hryvnia lost a third of its value in two months. Payments to Universal Bank on his flat in the capital’s suburbs have jumped 40 percent to $1,250 since President Viktor Yanukovych was toppled.

“I don’t have that kind of money,” Bukovetskiy, who’d been dipping into savings to pay his mortgage after losing his marketing job last autumn, said June 5 by phone. “I’m not hiding from my bank. I’m ready to pay but I want a compromise.”

Six months of political turmoil have rocked Ukraine’s finances, turning the hryvnia into 2014’s worst performer versus the dollar and prompting the government to sign a $17 billion bailout with the International Monetary Fund. Already battling an insurgency in the nation’s east, officials must now decide between placating the borrowers and further undermining the nation’s fiscal position or antagonizing them by doing nothing.

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http://www.bloomberg.com/news/2014-06-17/ukraine-facing-backlash-from-fx-borrowers-sunk-by-hryvnia.html