Ukraine sees echoes of the 1990s as financial crisis bites

Hryvnia currency dives further after central bank steps in; banks no longer lending; businesses hit hard


A CRIPPLING financial crisis in Ukraine is turning the clock back to the 1990s, when people kept dollars in their socks rather than at banks and smuggled cars to sell them on the black market and avoid the tax man.

When the Soviet Union collapsed in 1991, leaving the command economy in tatters, many in the newly independent republics such as Ukraine were left to fend for themselves, using guile to seek out goods and services and navigate the new capitalist reality.

Some business leaders say those days are returning as Ukraine nears financial collapse, with the hryvnia currency plunging about 30 per cent against the dollar on Thursday after the central bank ditched its unofficial peg.

As the...

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