A chart of Ukraine's currency is nonsensical once again today.

Supposedly the hryvnia rallied again today, if only by a miniscule amount 0.15%. Yet, once again the chart is complete nonsense.

Black Market Rate

The Black Market Rate today is a bit improved, with a bid/ask spread of 29.45 to 34.55. How long that rally lasts is questionable. I presume not long.

If one could exchange at the official rate, one would immediately have an arbitrage on the black market.

Translation: The alleged official rate is "for show". No one can get it, except perhaps favored politicians and bankers taking advantage of their position of authority.

Reader John, whose father was a key figure in the Ukrainian Resistance in WWII, and whose sister currently lives in Lviv in Western Ukraine sent the following link that shows what's really happening.

Interbank Rate Fell Sharply to New Record Low

Dateline February 26, ZN-UA reports Interbank Hryvnia Fell Sharply to New Low.

Interbank Hryvnia, despite yesterday's statement heads the National Bank and the Finance Ministry to take measures to stabilize the currency as of February 26, the hryvnia plunged to a new record low, reaching a figure of 34.5 per US dollar.

Thursday morning the interbank rate opened at 22-27 UAH per US dollar.

The collapse of the hryvnia this afternoon was associated with the cancellation of the February 25 ban on bank's ability to buy foreign currency on behalf of customers.

Central Bank Reversals

In the past week, the Ukrainian National Bank (UNB) suspended foreign currency trading, cancelled the suspension, then resumed the suspension, then cancelled the suspension.

Wording and back-references are so confusing, I am not precisely sure of the current state of affairs. Do they know either?

Today's Wall Street Journal reports Ukraine Dials Back on Latest Attempt to Halt Currency Free Fall.

Yesterday, the Journal reported, Ukraine's Central Bank Limits Access to Foreign Currency.

I believe the Journal missed one intraday flip-flop that I caught, or perhaps I caught an announced reversal that never happened.

It's all meaningless anyway. The black market is where it's at.

Monetization of Ukraine Bonds Fueling Currency Crash

Let's get to the heart of the matter. Ukraine is bankrupt. Please consider National Bank Adds Fuel to the Devaluation Fire.

The NBU continues to give the banks billions of dollars of loans, increasing devaluation of the hryvnia with one hand while imposing administrative restrictions on the other, adding fuel to the devaluation fire.

The refinancing is one of the catalysts of the present fall of the hryvnia:

• Direct (speculation by banks, including fictitious imports)
• Indirect (in which bank customers can use deposits in hryvnia to buy foreign currency)

It should be noted there are other factors:

1. There is also unsecured NBU monetization of government bonds to cover the state budget deficit. (The NBU dare not cutoff the government - editor) [Mish comment - if that editor lives in Ukraine, he will soon be charged with treason]

2. Quasi-fiscal payments of the Central Bank in the state Treasury (article an excess of income over expenditure in the previous year)

3. The decline of the economy on the background of the war in the Donbass

4. Reduction of inflow of foreign currency earnings of exporters; previously generated demand importers for currency; a withdrawal of currency abroad by using fictitious import contracts

5. Panic in the market and so on

Thus, with one hand imposing administrative restrictions on the market, another national Bank adds fuel to the fire devaluation.

It is also worth noting that since the beginning of the year up to February 24, the portfolio of internal government bonds (t-bills) in the NBU increased by 20.2 billion UAH for the period 2014 - 14.5 billion USD). In January, the figure was 9.6 billion UAH.

For more, see Devaluation Kerosene

Devaluation Kerosene

I have to say "Devaluation Kerosene" is an interesting title so I looked it up. The above article is a synopsis with a few more details, so there is no need to dive in further.

Ukraine Rations Cooking Oil, Flour, Sugar, Buckwheat

Let's conclude our Ukraine roundup of the day with this report in English: Kiev Introduces Rationing, as Falling Hryvnia Causes Shopping Binge.

Ukrainian supermarkets have imposed rationing of basic products after the drastic fall in the value of the hryvnia. The currency has lost 70 percent of its value causing people to stockpile food and buy electronics as a hedge.

Restrictions apply for goods such as cooking oil, flour and sugar, Ukraine's news agency UNN reports Wednesday. Retailers may sell no more than two bottles of sunflower oil, and two packs of buckwheat per customer and, depending on the store, from 3 to 5 kilograms of flour and sugar.

Bread, rice, potatoes, meat and milk are not yet rationed, but are not so plentiful on supermarket shelves.

Stores have also see higher demand for household appliances, as people consider consumer electronics an investment as prices increase on a daily basis, RIA reports. Inflation in Ukraine is expected to reach 27 percent by the end of 2015.

27% Percent? How about 50 Percent, Already

This article is a couple days behind my report from "Ellen" who said "People buy anything just to get rid of hryvnias" (See Emails From Kiev: Free Speech Vanishes, Total Media Thought Control; US Radar System Falls Into Rebel Hands?).

Inflation is easily up 50% this year. And it's rather telling that people consider consumer electronics as a store of value.

We are not talking about inflation here, we are talking about hyperinflation as noted yesterday in Ukraine Hyperinflation; Currency Plunges 44% in One Week! Actual Black Market Rates; Poroshenko Gives "Ultimatum" to Central Bank to Fix Exchange Rate.

Panic is in the air. And rightfully so.