We might have bypassed this topic if not for the strange appeal of the country's main bank to citizens. \nSTRANGE REQUEST \nLast week the cash dollar soared from the marks of 5.32-34 to 5.45-5.50 hryvnias. If you recall - such a thing had not happened with the American currency for more than 2 years, so the situation seemed panicky to many. And here there are also elections on the horizon. \nThe NBU believes that the increase in the buy/sell rates of the US dollar on the cash currency market is caused by seasonal factors. Supposedly, the end of the vacation season led to a temporary decrease in the supply of foreign currency on the cash market by approximately 15% in the first half of September compared to the previous month. The same situation, the National Bank claims, was observed in 2002-2003. In September people sold fewer dollars in exchange offices than in summer and this caused a temporary increase in the buy/sell rates of the US dollar. \nThe NBU forecasts a decrease in the rate of the US dollar on the cash currency market, and "suggests to the population, if possible, to postpone the purchase of US dollars for 1-2 weeks." A strange request. According to the logic of the Ukrainian ordinary citizen, after such "reassurances" the queues at exchange offices, and therefore the dollar rate, will obviously grow. The National Bank assured that it fully controls the situation on the currency market, and also "is preparing changes to the regulatory and legal framework in order to increase the manageability of the cash currency market." In other words, bankers can expect administrative intervention in rate formation. The dollar rate will become a pre-election Stalingrad for the authorities. In order to reduce the excitement, the country's main bank is ready to allocate any sum from its currency reserves. \nTHE OTHER SIDE OF THE COIN \nHowever, there is also another side of the coin. A fifth of the loans issued by banks (about 15 billion hryvnias) are problematic and this is putting negative pressure on the currency market. And also on international markets a negative conjuncture for Ukraine is beginning to form: oil is becoming more expensive again (and therefore also the gasoline with which Ukrainian cars are filled) and demand for Ukrainian metals is declining (and therefore the flow of currency into Ukraine will shrink). \nWell, and of course, let's not forget about the mass emissions of cash on the eve of the elections as additional payments, subsidies, pensions, etc. Therefore many are inclined to believe that many so-called average Ukrainians will convert hryvnias into dollars. They expect that the NBU will be forced in the near future to sell several million dollars in order to balance the market. \nALL CLEAR! \nThe Lutsk bankers we surveyed are inclined to believe that the latest increase in the rate is rather a temporary and seasonal phenomenon. \nYaroslav Stefurak, head of the retail business support department of the Volyn regional directorate of the "Aval" bank: The fact that demand for cash currency has now sharply grown is more connected with annual trends. People have gathered the harvest and are investing part of the funds in dollars. I think in a week the situation will correct itself and the rate will not grow. The National Bank is also not doing anything extraordinary. It seems that there they are confident in the manageability of the situation. \nArtur Stolyarchuk, head of the non-trade operations department of the Volyn regional administration of "PrivatBank": The dollar was influenced by seasonal factors and the expectations of the population. There is an emission of the hryvnia in connection with pension payments. And also some banks speculated on the problem. \nOne can feel that the peak increase in the rate has already passed. The market did not overcome the psychological mark of 5.50 per cash dollar. Now it may "sag" a little. \nFor a whole year banks bought much more currency than they sold. Therefore the question is only about the time during which banks will be able to transfer dollars from their correspondent accounts from abroad back to Ukraine. \nPENSION BOOMERANG \nPerhaps the most significant factor that psychologically sharpened people's attention to the dollar, forgotten in recent years, is the largest increase in pensions in the years of independence. If we leave aside the political reasons for this decision and focus on what economic consequences it will have, the situation looks like this. \nThe government promises to pay the new pension to 11 million Ukrainian pensioners as early as next week. Vice-premier Azarov calls the Cabinet's decision to double the minimum pension historic. He says that for the first time the government managed to fulfill Article 46 of the Constitution, which guarantees that pensions and social payments must be no less than the subsistence minimum. Therefore, all citizens whose pensions and supplements do not exceed 284.6 hryvnias will receive a supplement up to the sum of 284.6 hryvnias. Those who do not have sufficient insurance record as well as group III disabled persons will receive a supplement of no less than 152 hryvnias. The new increase in pensions will affect 11 million people. \nThe government assures that the money for this is available. It will come from off-plan revenues to the Pension Fund and funds from privatization. The authorities promise that next year, that is after the elections, the payments will not stop. \nThe first payments will begin as early as next week. No taxes will be deducted from them. And they will not affect the size of subsidies. It is known that the bodies of the Pension Fund of Volyn worked almost around the clock these days: all available office equipment and people were mobilized. Last Tuesday the payment documents were transferred to the localities. \nPeople's Deputy of Ukraine Yevhen Zhovtiak told us that he considers the increase of pensions to 284 hryvnias a shell game: "The maximum the government can do is, at the expense of revenues from privatization, to make one-time payments of the 'increased' pensions in September, October and November. There will not be enough privatization money for more. It is absurd to finance long-term multi-billion pension obligations at the expense of one-moment and hard-to-predict revenues from privatization, which sooner or later will run out." \nThe deputy also drew attention to the fact that there are grounds to distrust the claim that the decision to increase pensions was adopted "consciously" and planned for the second half of this year. Yevhen Dmytrovych says that there was an oratorical-philological slip of the premier during his answer to a question from the Berdychiv veteran Yukhym Rykov. Judging by everything, the premier was supposed to say that pensions would be raised to the level of the subsistence minimum for incapacitated persons for people who are incapacitated. But the premier said what he said, and the authorities had to pretend that this was how it was planned - pensions would be raised for EVERYONE. \nAnd now imagine how much cash hryvnia will enter circulation already at the end of September-beginning of October?! The additional monthly expenses of the Pension Fund amount to more than 1 billion hryvnias. In Volyn alone the monthly need for pension payments has grown by 26 million hryvnias and today amounts to 86 million. The elderly will receive this money. It would be good if they left part of it on deposits. But take into account the real, not the official, level of price increases and... In other words, it looks like with one hand they will give us money, with the other they will take it away. \n