Banks and Stability

In terms of political and economic instability, and monetary uncertainty in Ukraine, the implementation of deposit in a bank becomes an increased risk. The first question that arises from potential investor: "Which bank is stable and solvent?". And we are talking about solvency in the short term – up to 3 months since, to date, over a longer period can not be predict the development of the situation with reasonable certainty. The second question is this: "In what currency to carry out the contribution to the bank?". The main choice is between the national currency deposits with high interest rate and deposits denominated in U.S. dollars, but with a lower interest rate.

According to the forecasts of the exchange rate pair hryvnia / dollar at Q1 2010, there is a high probability of devaluation hryvnia to the level of 8,5-8,9 grn. for long. usa. In such circumstances, the choice of currency deposits is necessary to calculate all risks of loss of value contribution. Assume that we have 1,000 dollars.

U.S., current exchange rate is 8,0 uah / usd. We are faced with two alternatives: a three-month deposit in U.S. dollars – the sum of 1,000 dollars. Dollars or deposit in local currency – 8000 uah. Table 1 shows the average current interest rates on both deposits, as well as the total amount at after 3 months. Table 1: Comparison of Payment 3 month deposits in dollars. U.S. hryvnia currency deposit amount of the deposit interest rate (annual) interest payments, the sum (3 months) Total: deposit + interest usd 1000 12% 1930 1030 uah 8,000 20% 400 8400 B Table 1 shows that the stable exchange rate, deposit in uah more income than a deposit in dollars. usa. So hryvnia deposit in U.S. dollars offered (400 / 8) $ 50. U.S., ie, at $ 20. U.S. more, Table 2. Table 2 The advantage of the deposit, chosen currency at the rate of 8,0 uah / usd Currency Deposit Total amount paid on 3 month deposit equivalent in dollars. United States, at the rate of 8,0 uah / usd Benefit, at the rate of 8,0 uah / usd usd uah 1030 1030 8400 1050 + $ 20. U.S. now necessary to determine at what rate, the advantage national currency – the high interest rates that will be offset. Use we have developed currency deposit calculator on the site Vkladchik.In.UA. Calculations show that the devaluation of the hryvnia against the U.S. dollar only to the level of 8,155 uah / usd advantage of a higher interest rate leveled all the way! At the rate of 8,5 uah / usd total losses on deposits in uah (UAH 8,000.) Amount – 42 dollars. usa. Taking into account, that the devaluation of the hryvnia to the level of 8.5 in the 1st quarter of 2010. vysokoveroyatna, deposits in national currency for the next 3 months makes no sense from the standpoint of profitability. Foreign currency deposits for 3 months will not only interest income, but also protects against exchange rate fluctuations. Recommendations for the 1st quarter of 2010. Deposit must be at 100% of foreign exchange.

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