Monday, February 29, 2016

Exchange Rates

Exchange rates concern me as my pension is paid in CAD, converted to USD to send to Ukraine and then converted to UAH to spend. Everyone in the middle takes a piece of the action but it is all done automatically over the internet so can't complain.  It has only been in the last year that the CAD and USD have parted company to any extent.

When I first came to Ukraine in 1997, the exchange rate was about 5 Hrivna to 1 dollar.  It stayed that way until the bottom fell out of the global washtub in 2008 and then went to 8 Hrivna to the dollar.  That held until the Time of Troubles and Russia's invasion of Ukraine in 2014 and oil prices took a tumble about the same time.  The Canadian dollar held in and around the mid teens in Hrivna and the US Dollar in the low-mid-twenties.  The CAD has strengthened against the USD recently and now trades at about 20 Hrivna to the CAD.

The fall in value of the Hrivna helps our export position but makes paying off foreign denominated currency debts very difficult.  It also means that imports come in at world prices.  Prices here are rising accordingly and wages or especially pensions have not/cannot keep up and have fallen dramatically in real terms.  Utilities (gas and electricity) prices have skyrocketed relative to incomes but this needed to happen as utility companies are not banks nor social safety nets.  Big league corruption in oil and gas has been slowed if not eliminated but small scale local stuff still goes on I am sure.

There is a long list of people, pensioners in particular who are signed up for government assistance with utility bills.  Not surprisingly there are those who allegedly can "afford" it that are also signed up. Also if you put a large magnet under the gas meter it effectively stops it, I have been told, however if you get caught they shut off your gas and open a criminal case against you. Unless you can bribe your way out, I suppose.



6 comments:

  1. I'm sure it is explained in older posts but why did you move to Ukraine?

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    1. My wife is a Ukrainian citizen and it is easier for my kids to come to Ukraine than for hers to come to Canada to visit. Also my pension goes farther here than in Canada.

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  2. I worry about you over there..I don't trust the Russian's to declare fecking war on every surrounding country.

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    1. No one declares war anymore. NATO is finally waking up to the danger that Russia poses. Whether it is in time or whether all members will cooperate in their own protection, I don't know. Even Britain has cut way back on their military spending and preparedness.

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  3. I always have a sour laugh at conventional retirement planning 'wisdom': "When you're retired you won't need as much income." Yeah, right. Unless the cost of living keeps escalating (which it always does). Then you'll need as much or more income just to keep the house warm and groceries on the table. Hope it doesn't come down to a choice between heating the house and criminal charges, though.

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    1. You need more money when you retire because you have time to spend it. We won't have to choose between heat and jail but there are many who must.

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