The government pays soviet bills

Yulia Timoshenko’s government uses any possibility to increase the compensation financing of debts of USSR Savings Bank. Yesterday the Cabinet gave UAH 400 million to Oschadbank, which can be taken by 400 thousand depositors per 1 day. But more than 11.5 million depositors registered in the bank’s register will not get money this year. Experts estimate the Cabinet’s decision in different ways: a positive social effect can be leveled by inflation expectations.

Experts differ in their appraisal if compensations will influence consumer inflation level. "Although compensation sum can not speed up the inflation, we should not forget about factor of exaggerated inflation expectations. This factor in the beginning of compensations increased price level by 1,5%",– General Director of Institute for Budgetary and Socio-Economic Research Irina Scherbina notes. The President of Ukrainian Society of Financial Analysts Yuriy Prozorov is more categorical: "This amount will not have enough time to influence this year’s inflation. But in 2009 in the context of sharp crisis intensification influence of compensations will be unnoticeable". Before now, experts predicted customer demand decrease in the beginning of 2009 and the slowdown of inflation. According to Mr. Prozorov, supplementary compensations will now stimulate now customer demand in the country: "While in the beginning of the year we were against compensations, in the context of the crisis we think such step is right".

The source: Ъ-Ukraine