• Ukraine Moves into ‘Total Full Quarantine’
  • Metro Will Be Out for One Month
  • US Veers into Recession
  • Rada Fiddles While Rome Burns
  • Plummeting Oil and Gas Prices Cut Ukraine’s Energy Import Bill in Half
  • Central Bank Sells $2 billion, Holding Hryvnia Devaluation to 11% in Two Weeks

Starting yesterday, Kyiv buses can be used only by ‘essential personnel’ wearing masks and displaying special passes. With the metro closed since Tuesday, private cars and taxi are the only transport available in Ukraine’s political and business capital, a city of 3.7 million people. Judging by scheduled maintenance work, the metro will be closed for a full month, through April 17, reports Apostrophe.

Justifying a ‘total full quarantine’ of Ukraine, Interior Minister Arsen Avakov writes on Facebook: “Only critically necessary business entities should work in the country, regardless of the form of ownership!…the rest should be closed, and people should be quarantined at home…we will count losses and think about compensations later, when we survive!” On Wednesday, military police and National Guard members will help municipal police enforce restrictions designed to slow – and even stop – coronavirus in Ukraine.

New restrictions include bans on using playground equipment and keeping a density of one person per 10 square meters in supermarkets, pharmacies and bank branches. With this policy, lines often form outside food stores. Last week, authorities closed restaurants, bars, gyms, salons, shopping malls, schools, trains, domestic air travel and the nation’s three metro systems. In the Donbas, crossings were halted yesterday between the Russia-controlled and Ukraine-controlled sections. On highways radiating out of Kyiv, police checkpoints are enforcing limits of 10 passengers per bus.

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As of Sunday night, there were 63 publicly confirmed coronavirus cases in Ukraine, including at least six in Kyiv, Ihor Kuzin, acting director of Ukraine’s Public Health Center, tells Ukraine 24’s Real Politics TV talk show. Three people have died in Ukraine. Two Ukrainian women, both in their early 60s, have died in northern Italy.

The United States economy is entering a recession, writes Michelle Meyer, chief US Economist at BofA Merrill Lynch “We officially declare that the economy has entered a recession…joining the rest of the world. It’s a deep leap down,” she writes. Meyer predicts the US economy will shrink by 12% in the second quarter, and the US GDP will decline by 0.8% this year.

The Ukrainian government must act fast to avoid a repeat of the 15% GDP contraction the country experienced in 2009,” Yuriy Gorodnichenko warns in an Atlantic Council essay titled “Saving Ukraine’s Economy from the Coronavirus Crash. “During panics, investors typically liquidate their risky positions in countries like Ukraine and move their funds to safe havens such as US government debt,” writes Gorodnichenko, a Ukrainian who teaches economics at the University of California, Berkeley. “It is safe to assume that the IMF and other international institutions such as the World Bank and European Commission will be the only affordable sources of foreign currency.”

Ukraine is negotiating an emergency package from the IMF to contain the economic fallout from coronavirus, Yakiv Smoliy, governor of the National Bank of Ukraine, confirmed Friday. He said it is too early to say how large the aid would be. Conditions would be separate from the $5.5 billion deal agreed last December.

World markets may be melting down, but Ukraine’s Rada is taking a 3-week break before considering two bills designed to unlock the $5.5 billion in IMF aid. For fear of coronavirus, the parliament is ignoring President Zelenskiy’s March 16 call for rapid approval. It will only pick up the bills, in committees, after April 7, reports the Kyiv Post. The Rada does not want to meet as a group to avoid contagion by coronavirus, the Post reports in a story titled: Crucial laws stalled in parliament as lawmakers self-isolate from work. Last week, a Rada ‘source’ suggested in an Ekonomischeska Pravda story that it would be simpler if the IMF give the money first, then wait for Rada approval of the bills.

The coronavirus pandemic is not expected to greatly cut prices for Ukraine’s top export – food. Dmytro Sologub, deputy governor of the National Bank of Ukraine, tells reporters: As we understand it, even in a crisis, especially when sitting at home, people will consume food. This is the last thing they will refuse.”

Ukraine does not plan to limit food exports, Taras Vysotsky, deputy minister for Development of Economy, Trade and Agriculture, tells Interfax-Ukraine. He says supermarket chains are fully stocked. Last week, President Zelenskiy proposed the Cabinet of Minister draw up a list of products restricted from export.

Plummeting oil and gas prices are expected to cut in half Ukraine’s bill for energy imports this year, Sologub calcutes. The energy bill could be $6 billion – half of last year’s $12 billion. After a mild winter, European natural gas prices are at decade lows. The price of Brent oil has fallen in half this year, to $27 a barrel. With Russia and Saudi Arabia locked in war over market share, Citibank and Goldman Sachs predict that oil could fall to $20 a barrel in coming weeks. Energy last year accounted for 20% of Ukraine’s imports.

The Cabinet of Ministers has approved extending the contract of Naftogaz CEO Andriy Kobolyev for another four years, to March 2024. UNIAN reports that Kobolyev’s salary was cut in half. It is unclear if Kobolyev is to receive his commission for winning the $2.9 billion arbitration settlement from Gazprom last December.

Andriy Favorov, head of gas production and sales at Naftogaz, is self-isolated at home in Kyiv after returning from the US with a mild case of COVID-19, reports his father, Mykhailo, an Atlanta-based epidemiologist. Andriy Favorov says in a video posted on Facebook Friday: “I feel great, but I’m bored.”

The central bank sold $2 billion in foreign exchange in the last two weeks, limiting the hryvnia devaluation to 11%. Currently reserves are $24 billion, reports the National Bank of Ukraine. Last week, the Bank sold $1.038 billion. The week of March 10-13, the bank sold $982 million. Oleh Churiy, a deputy governor of the bank, noted to reporters that some regional currencies have devalued by even more. Ruble has lost 25% since Feb. 22.

Today’s official rate is 27.74 UAH/USD, six kopiyky stronger than Friday’s rate. The street exchange rate has hovered around 28.50 since Wednesday.

Banks are prohibited from refusing to give depositors their money, Yakiv Smoliy told reporters Friday. “We forbade banks to introduce any restrictions on deposits whose term has expired,” said the Governor of the National Bank of Ukraine. “That is, if your deposit has expired, you can do anything with it: extend, withdraw. There are no restrictions.” He said there has been virtually no outflow of deposits this month.

To deepen the market for Ukraine government bonds, PrivatBank’s web version – Privat24 – now allows customers to buy and sell of bonds online. Customers who open an online trading account can also see online the PrivatBank’s current quotes for the sale of government bonds.

  • COVID Chaos: Half a Million Ukrainians Out of Work?
  • Germany’s Economy Shrinks
  • In Ukraine, Bank Branches Close, Supermarkets Cut Hours, Presses Stop, Electricity Use Fizzles
  • Before March Devaluations, Kyiv and Moscow Tied for Cost of Living

Ukraine’s coronavirus shutdown could leave up to half a million Ukrainians unemployed, calculates Timofei Milavanov, Economy Minister until two weeks ago. “How many people will be left without work as a result of the crisis? In my opinion, from 170 to 500 thousand people. And this is a conservative estimate,” Milovanov writes on Facebook, drawing on Q1 data from China. “The most vulnerable to job loss during the crisis are informally employed workers. In Ukraine, this is about 20% of the total number of employees, or 3.4 million people. Of these, 22-23% work in the areas of trade, minor repairs, food, hotels and transport. That is approximately 700 thousand people.”

Depending on the duration of the coronavirus shutdown, the GDP of Germany, Europe’s biggest economy, will shrink this year by 4.5% to 8.7%, according to a forecast by the Institute of World Economy in Kiel. A shutdown through April would mean a €150 billion loss of economic activity and 4.5% drop for the year. If the disruptions stretch through August, Germany’s GDP will fall by 8.7%. So far, the most affected sectors are: aviation, car manufacture, leisure and hospitality.

Germany’s business mood index suffered this month its sharpest drop since 1991, regressing to the level of a decade ago, reports the Munich-based Ifo Institute for Economic Research. “Germany’s economy is fast moving towards a recession,” Ifo CEO Clemens Fust said, citing the two-week survey which was completed Wednesday. Germany rivals Poland as Europe’s largest investor and trading partner for Ukraine.

The closing of Kyiv’s metro is cutting clientele and making commutes impossible for many employees, forcing banks to close office and supermarket to reduce their hours. Credit Agricole has closed 10% of its 150 branches, Pivdenny has closed 20% of its 98 branches, Alfa-Bank Ukraine has closed 20% of its 250 branches, reports Interfax-Ukraine. All banks were cutting their hours and closing for a midday disinfection break. Fozzy Group and Novus are trimming their supermarket hours, largely so employees can get home.

Ukrainian Media House, publisher of 16 newspapers and magazines, is suspending work for the length Ukraine’s quarantine, officially two weeks. In addition to seeking to protect the health of employees, the company cites on its website the closing of news kiosks and “the inability to organize timely printing, delivery and sale of newspapers.”

Electricity consumption has decreased by 5% in Ukraine since the introduction of quarantine measures, reports Ukrenergo National Power Company. Tuesday and Wednesday saw the shutdown of the nation’s three city subway systems – all major power consumers.

The dip in electricity use may render partly redundant a new 65% duty on Russian electricity and coal imports that was to come into effect on April 1. Electricity imports are no longer need. As for coal, Ukraine maintains a high price $80/ton for steam coal largely subsidize Ukraine’s inefficient mines. The benchmark price for steam coal in Europe is $50/ton, a price that Russian coal companies could meet.

Concorde Capital’s Alexander Paraschiy writes of the Cabinet of Ministers’ Wednesday decision to tax Russian coal: “The key beneficiary of this decision will be DTEK Energy (DTEKUA), which produces almost 90% of steam coal in Ukraine.”

In April, Ukraine hopes to win approval for IMF funding from a $40 billion Rapid Financing Instrument designed to give emerging market countries quick relief from coronavirus stress. “The results of the negotiations will be in the coming weeks,” Yakiv Smoliy, governor of the National Bank of Ukraine, was quoted Thursday by the central bank’s press office.

Concorde Capital’s Alexander Paraschiy writes of Ukraine’s looming financing squeeze: “[Ukraine has] to repay $4.1 billion in external loans in April-December 2020, and now it looks like refinancing these amounts on the private market is impossible. Therefore, boosting multilateral financing for Ukraine is essential. We expect that Ukraine’s parliament will adopt two bills in April that will open the window for IMF’s EFF loan, and the IMF will be more generous than had been expected.”

Tax relief in the time of coronavirus: President Zelenskiy signed on Wednesday a law 1) waiving penalties for tax violations from March 1 to April 30; 2) establishing a temporary pause on audits and investigations March 18 to May 18; 3) extending to July 1 the deadline for declaring and filing annual income taxes; and 4) exempting non-residential real estate owned by individuals from property tax from March 1 to April 30.

To start replenishing banks with foreign currency banknotes, the central bank exchanged €35 million in cash for non-cash currency with six banks on Thursday. Today, the National Bank of Ukraine promises to make up to €100 million in notes available for exchange. Next week, more euro and dollar banknotes are to arrive here. The central bank says the top 10 banks with foreign currency accounts are: PrivatBank, Oschadbank, Alfa Bank, Ukreximbank, Ukrgasbank, UkrSibbank, FUIB, Raiffeisen Bank Aval, OTP Bank and Pivdenny Bank.

The central bank sold $200 million yesterday, guiding the hryvnia official exchange rate down to 27.80/dollar today. Since the March 9 banking holiday, the central bank has spent $1.7 billion while the hryvnia has devalued 11% against the dollar. Following this strategy of allowing the hryvnia to steadily weaken, the central bank sold $200 million Wednesday and $300 Tuesday. In a posting on Facebook, central bank officials maintained their policy of not adopting foreign exchange controls. Ukraine’s foreign currency reserves are $25 billion.

Last year, the hryvnia was the world’s strong performing currency against the dollar, appreciating by 14%. Exporters and companies with expenses in dollars complained to the government.

Due to last fall’s strong hryvnia, Kyiv’s cost of living rose to tie Moscow’s, according to the latest Economist Intelligence Unit’s Worldwide Cost of Living Index. Based on 160 prices taken last fall in 133 cities, Kyiv climbed 22 places to tie with Moscow at 86th place. Since March 4, the ruble has lost 20% of its value against the dollar.

Ukraine has 21 confirmed cases of coronavirus and three fatalities, the Health Ministry reported Thursday. By region, they are: Chernivtsi Oblast-10 cases (one fatality); Zhytomyr – 2 (one fatality), Kyiv City – 3; Kyiv Oblast – 2; Dnipropetrovsk – 2; Donetsk – 1; and Ivano-Frankivsk Oblast – 1 (one fatality).

  • Facing ‘Economic Crisis’, PM Asks IMF for More Money
  • Ukraine’s Hryvnia, Bonds, and GDP Warrants are Road Kill in the West’s Dash to Cash
  • Central Bank Launches Massive Money Laundering Operation: Zapping COVID-19 on Banknotes
  • UIA Takes 2-Week Holiday

With Prime Minister Denys Shmygal warning on television that the nation faces “a possible economic crisis in Ukraine” he said yesterday his government is negotiating with the IMF for additional aid, beyond the $5.5 billion tentatively agreed upon last December. This would be aid to alleviate the economic impact of the coronavirus epidemic, according to the National Bank of Ukraine website. “We are moving forward regarding financial support from this international organization,” Shmygal said of the IMF. “We hope for a positive result in the near future. The IMF messages are pretty positive today.”

The EU heads toward a recession this year, Isabel Schnabel, a director of the European Central Bank, tells the German newspaper Die Zeit. “We are experiencing a very severe economic shock,” Schabel says. “The likelihood of recession has increased markedly.” Economists define a recession as two consecutive quarters of negative economic growth, measured quarter over quarter.

After US Treasury Secretary Stephen Mnuchin warned that US unemployment could hit 20% – double the level of the 2019 financial crisis – the US Senate approved yesterday a corona pandemic relief package that could total $1.3 trillion. Separately, the International Labor Organization warned yesterday the pandemic could cost workers around the world as much at $3.4 trillion in lost wages this year.

Timothy Ash writes from London: Write 2020 off from a growth/economic activity perspective. And the economic losses are going to be huge, clearly, with people talking about China growth down to 3%, recession in Europe and the US potentially.”

To manage the hryvnia’s slow motion devaluation, the National Bank of Ukraine sold $200 million Wednesday, the central bank reports on its Facebook page. This is one third less than the $300 million sold Tuesday. The bank says its foreign currency sales are designed to smooth fluctuations, not to maintain a fixed or targeted rate.  With today’s rate set at 27.27 hryvnia to the dollar, the hryvnia has devalued 9% in 10 days. Some street level exchange shops offered dollars Wednesday at 28.5 hryvnia. With the hryvnia back at the level of one year ago, exporters feel relief.

The Finance Ministry sold $72 million in 10-month bonds at its weekly auction on Tuesday. The weighted-average rate was 3.5%. Although demand was one third the level of the last auction, in February, the sale is considered a success. ICU’s Taras Kotovych calls it: “A quite positive result given current conditions.”

Concorde Capital’s Evgeniya Akhtyrko writes: “The pricing of UAH-denominated local bonds is problematic given the fast depreciation of the national currency and the overall turmoil at the financial market related to the coronavirus pandemic.”

As Western investors scramble to get cash, Ukraine securities plummet in value. Ukraine sovereign 2028 Eurobonds, which traded one month ago at a yield of 5.75%, traded yesterday at 13.15% – near junk bond levels. During the same month, Ukraine’s GDP warrants halved in price, to 56 cents. Timothy Ash writes: “The buyback cost to the sovereign has gone from $3.4bn to $1.7bn. [I] don’t think the MOF is going to get a better chance to buy/exchange these more cheaply than this.”

PrivatBank and Alfa-Bank Ukraine have suspended issuing cash dollars from client accounts. The banks – and the central bank – blame the situation on a shortage of US currency in the country. The National Bank of Ukraine says that currency controls will not be re-imposed. The bank says new shipments of currency will arrive in Ukraine shortly. The disruption of air service to Ukraine is not supposed to affect cargo only flights.

Believing that the coronavirus can survive on banknotes, the central bank is withdrawing hryvnia notes from circulation and replacing them with new ones stored in its vaults. Old notes will be held in quarantine for 14 days. “Banknotes suitable for circulation will be packed in bundles and shrink film with processing at a temperature of 160 degrees Celsius, which will also contribute to the destruction of the virus,” reports the National Bank of Ukraine website. The central bank asks banks to frequently disinfect ATM machines and cash windows.

The money from the citizen who pays bills, fines or makes other payments at the bank will be quarantined,” says Yakiv Smoliy, governor of the National Bank of Ukraine. The bank website advises: “Businesses and citizens should reduce contact with cash. To prevent the spread of coronavirus, the National Bank recommends that the population and businesses switch to cashless payments as much as possible.“

Ukraine’s government on Wednesday imposed a state of emergency in Kyiv region to contain the spread of coronavirus. As of yesterday, Ukraine had 14 confirmed coronavirus cases, including two deaths. In addition, 24 Ukrainians are hospitalized in Lviv after returning recently from abroad with coronavirus symptoms, One known case in Kyiv region is lawmaker Serhiy Shakhov who returned from France on March 11. He participated in TV talk shows on Thursday and Friday before feeling sick on Sunday, he said on Facebook.

Although Ukraine now bans non-essential car trips between cities, BlaBlaCar, the internet-based car pooling service, says it is suspending its Busfor service, but maintaining its car pooling service for private cars. Although cars often fill with passengers who ride at close quarters for hours at a time, BlaBlaCar says the service offers people the “possibility to call and talk to passengers before the trip in order to make sure that all participants of the trip feel good.”

With the arrival of a UIA jet in New York Tuesday afternoon, Ukraine International Airlines ended scheduled flights throughout its international network. About 2,000 scheduled flights are canceled through April 3. The airline’s fleet of 35 planes is parked at Kyiv Boryspil, and 90% of staff are on unpaid leave.

Two weeks of quarantine, will cost Lviv airport $1 million, airport director Tatyana Romanovskaya tells 112 TV. Shops and restaurants closed Monday. The lights are turned out at night to save money, and most employees are on leave. Noting that the January/February passenger flow was up 29% y-o-y, to 303,000, the director of Western Ukraine’s largest airport says: “The summer is ahead and the vacation period, which I want to believe, will take place.“

  • Total Transit Shutdown Today: Metro, Trains and Planes
  • Needed: US Dollar Bills
  • Great Big Sucking Sound: Money Leaving EM
  • Corona Could Cut GDP Growth in Half

Starting today, Ukrzaliznytsia closes all train stations and passenger rail service across the nation. To prevent the spread of coronavirus, the state railroad is stopping all suburban, regional and international passenger service. Freight continues unimpeded. Ukrainian Railways is the world’s sixth largest passenger transporter in the world and the seventh largest freight transporter. Also stopped are: regional buses, domestic flights and non essential intercity car trips.

Also starting today, Ukraine’s three underground subway systems – in Kyiv, Kharkiv and Dnipro – are closed through April 3. In Kyiv, passengers may only board surface transport – buses, trams and trolleybuses – wearing masks. No more than 10 people are to ride in one vehicle. Police are to enforce compliance.

Behind the restrictions are fears of coronavirus spreading east from the EU to Ukraine. Yesterday, Ukraine recorded its second coronavirus death, a 33-year-old woman in Chernivtsi, 500 km southwest of Kyiv. Ukraine now has 14 confirmed cases. This includes five new cases in Chernivtsi –two adults, aged 18 and 31; and three children, aged 10, 1 and six months.

National Bank of Ukraine officials blame part of the devaluation on a shortage of dollar bills caused by new air freight restrictions. “There are some difficulties with the U.S. dollar cash, but this is only due to the fact that foreign currency was imported into the banking sector before the quarantine events by airplanes from abroad,” Kateryna Rozhkova, first deputy governor of the central bank, said in an online press briefing. “We are now working with banks to ensure settle this issue and to establish another system for delivering cash foreign currency to Ukraine. Therefore, again, do not panic – just wait.”

No foreign exchange curbs are planned by the central bank, Oleh Churiy, another deputy governor, told reporters in a live press conference. “The NBU does not consider imposing any restrictions,” he said. “We believe that the banking system is liquid.” Addressing the shortage of dollars and euros, he said: “In coming days, a large amount of cash foreign currency is expected to be delivered.” Similarly, the bank’s website reported: “Due to the termination of air travel and the closure of borders, cash dollars and euros are being delivered to Ukraine with a delay.”

Ukraine is swept up in a far larger outflow of dollars across Emerging Markets since late January, the Institute of International Finance reported Tuesday. “Our high-frequency capital flows trackers point to a sudden stop in EM due to the combination of uncertainty around the spread of COVID-19, and large oil price and financial shocks,” says the Washington-based association of 500 international financial institutions. “The trackers point to an unprecedented shock to nonresident flows to EM since the COVID-19 outbreak became a global concern in late January. Cumulative capital outflows since the COVID-19 episode began in late January are already twice as large as in the global financial crisis and dwarf stress events such as the China devaluation scare of 2015 and the taper tantrum in 2014.”

Slowing the devaluation of the hryvnia, Ukraine experienced a trade surplus in January, reports State Statistics Service. For Ukraine, a net energy importer, low oil and gas prices helped to boost the trade surplus to $138 million. European natural gas prices are at a 10-year low and oil prices have fallen in half since January. Exports to China, Ukraine’s top trading partner, hit $448 million in January – a 79% increase y-o-y. Last year, Ukraine exported $51 billion worth of goods, and imported $61 billion.

A government ban on Ukraine’s major food export products – grains, oilseeds, vegetable oil, and poultry – “may completely shut down the industry and lead hundreds or thousands of businesses to bankruptcy, depriving thousands or even hundreds of thousands of their jobs,” warns Alex Lissitsa, president of the Ukrainian Agribusiness Club Association. President Zelenskiy has asked the Cabinet of Ministers to decide a list of food items that could be prohibited from export, in the event shortages appear.

If the coronavirus restrictions “are not prolonged” Ukraine’s economy will shrink by -1.6% in the first quarter and will end the year with 1.9% growth, estimates Adamant Capital. “We expect it take a substantial toll on the economy. Domestic trade, education, transportation, hotel and restaurant services, and entertainment are likely to be among the larger sufferers, though spillover effects to other sectors (such to finance and real estate) are likely,” the Kyiv-based investment house reported Tuesday. Last year’s growth is estimated to be 3.6%.

Given the world’s fast-moving economic crisis, Ukraine should lobby the IMF for a $10 billion Extended Fund Facility, nearly double the $5.5 billion deal now under discussion, argues Timothy Ash, senior sovereign analyst for Blue Bay Asset Management. “Still well below Argentina’s 10 times quota allocations,” Ash writes from London. “Increasing the sum I think would also impart greater urgency on the part of Rada deputies to pull their fingers out in terms of outstanding prior actions on the EFF.”

Pay to play? The Rada may tie a vote to create a farmland market to IMF approval of financial aid, a ruling party ‘source’ tells Ekonomichna Pravda online newspaper. Many economists believe a farmland market would inject billions of dollars of investment into rural Ukraine, raising yields and living conditions. Many politicians are not convinced. The farmland market bill that is to emerge in two weeks in the Rada is expected to ban foreigners from buying land and to limit private holdings to 10,000 hectares.

  • Coronavirus to Pull Ukraine into Global Recession
  • Ze Wants to Close Kyiv Metro Tomorrow
  • Kyiv Closes All Non-Essential Commerce Today
  • Cargo Moves Normally

Given global economic trends, Ukraine seems destined to fall into a recession this year, along with much of the rest of the world. Stocks on the New York’s S&P dropped 12% Monday, the worst fall since Oct. 1987. The index is down 30% since Feb. 19, the severity of the coronavirus epidemic started to become clear. Goldman Sachs predicted Monday that the US, the world’s largest economy, will register zero growth this quarter and will shrink by 5% in Q2.

In China, the world’s second largest economy, industrial activity in the first two months of this year fell by 13.5% compared to January-February last year – the biggest drop in 30 years. Investment fell by 25%, according to numbers released Monday. Last year, China became Ukraine’s biggest trading partner.

In one short term good sign for Ukraine, a net oil importer, global oil prices dropped below $30 a barrel Monday. In coming weeks, analysts predict that oil prices could drop below $20 a barrel, a level that would pull Russia, Ukraine’s second largest trading partner, into recession. Bloomberg predicts: “World oil demand in 2020 may show the largest drop in history.”

Most airlines in the world will be bankrupt within 10 weeks without government support, predicts CAPA Centre for Aviation, a consultancy. “Cash reserves are running down quickly as fleets are grounded, and what flights there are operate much less than half full,” it warns in a new report. Ryanair, Europe’s biggest low cost carrier and a major provider of air service to Ukraine, announced Monday that it will ground most of its fleet over the next 10 days. Ukraine International Airlines estimates that flight interruptions due to coronavirus will cut its revenues by one third during the first quarter.

With the first two coronavirus cases confirmed in Kyiv, President Zelenskiy proposes shutting down the city metro system as of noon of 17th of March. In a video address, he said the government will meet “to prohibit rail, air and bus intercity and interregional passenger transport, to prohibit the operation of subways. Urban transport can be carried out in the mode: up to 10 people in fixed-route taxis and taxis. And up to 20 people in trolleybuses, buses, trams.” In normal times, the Kyiv metro carries 1.3 million riders every weekday.

“China’s experience shows that unpopular and harsh measures overcome the virus and save lives,” Zelenskiy said. “The experience of other countries shows that spinelessness and liberalism are allies of the coronavirus, so we will act harshly, urgently, perhaps unpopular, but for the sake of one thing, the life and health of Ukrainians.” Church services are to be suspended. The Rada is to meet in emergency session to debate imposing criminal penalties on violators of coronavirus quarantine rules.

Today, Kyiv joins Lviv, Odesa and Ivano-Frankivsk in shutting all cafes, bars, gyms, beauty salons and shopping malls. Schools closed last week. Banks, gas stations, grocery stores, pharmacies, and post offices will remain open. “We understand that this is an inconvenience for the city residents and a loss for the business,” Kyiv Mayor Vitali Klitschko said. “But they are forced and temporary. Profit and money are important. But the health and life of people are paramount!”

Ukrzaliznytsia, a logistics linchpin for much of Ukraine’s exports, reported Monday that “international and domestic freight transportations are carried out according to the schedule.” On the passenger side, 303,000 people have returned their train tickets since Wednesday, receiving $3 million in refunds. Last night, Ukrzaliznytsia suspended train service between Boryspil Airport and Kyiv’s Central Passenger Rail Station.

Although Ukraine has closed almost half of its 230 international crossings, “in terms of movement of goods, exports, imports, the situation is completely under control,” Maxim Nefyodov, head of the State Customs Service, tells Ukrinform. “We do not expect any significant problems.” To inform shippers, Customs has made public an interactive map of closed and open crossing points.

Through September, Ukraine’s IT industry will be combatting a slowdown due to the coronavirus epidemic, Konstantin Vasyuk, executive director of IT Ukraine Association, predicts to UNIAN. He said: “We will have to work in conditions of budget optimization and, possibly, changing business models – we see mass events being canceled, companies are switching to a remote mode of operation and revising contracts.” In a survey of 24 IT companies late last week:  92% of companies canceled business trips abroad; 88% canceled large meetings; and 71% – switched to online, video conferencing for meetings.”

President Zelenskiy ordered his rookie Finance Minister, Ihor Umansky, to “hold talks with the IMF and other international partners on the provision of financial support to overcome the consequences of the coronavirus.” Two weeks ago, Zelenskiy unexpectedly fired Finance Minister Oksana Markarova. During her five years at the Ministry, she had dozens of face to face meetings with representatives of the IMF, World Bank, IFC, and EBRD.

With an eye to potential shortages and inflation, President Zelenskiy asked the Cabinet of Ministers of Ukraine to limit the export of certain food products. Ukraine is Europe’s largest food exporter and food accounts for about 43% of exports. In a video address Monday, Zelenskiy asked the government to draw up the list of items to restrict.

Ihor Petrashko, 44, deputy head of UkrLandFarming, is the lead candidate to become Ukraine’s economy minister, the Kyiv Post reports, citing two ruling party members who attended a meeting where his candidacy was announced. For the last seven years, he has worked at UkrLandFarming, which controls about half a million hectares. Oleh Bakhmatiuk, the owner, is wanted in Ukraine on suspicion of bank fraud. Until the cabinet purge of March 4, the economy minister post was held by Timofiy Mylovanov, who had been President of the Kyiv School of Economics.

The Supervisory Board of Naftogaz has voted to extend for four years the contract of CEO Andriy Kobolyev. Now, it is up to the Cabinet of Ministers to approve – or deny – extending the contract, which expires Sunday.

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