The crisis in the former Soviet republic, a transit nation for Russian energy exports to Europe, reached its peak after President Viktor Yushchenko issued a decree to dissolve parliament, which is currently dominated by factions loyal to his long-time rival, Prime Minister Viktor Yanukovych. Lawmakers refused to obey pending a ruling by the Constitutional Court, and supporters of the rival factions have faced off on the streets of the capital, Kiev.
"The political crisis has had a negative effect on expectations for the financial, currency, and trade markets, which threatens the economic and financial security of the country," the Finance Ministry's press service said.
The urgent measures include budget cuts, the close monitoring of inflation and proposals to revise the size of social benefit payments. The government also decided to ensure the steady operation of strategic facilities, tighten control over energy transit, and beef up security at state facilities.
The government plans to consult the National Bank about monetary and fiscal policy, and on how to prevent the shrinking of foreign currency reserves, the ministry said.
Among the negative consequences of the political wrangling, the ministry cited the downgrading of Ukraine's financial outlook by the international ratings agency Standard & Poor's, the threat of collapsing negotiations on the country's accession to the World Trade Organization and the excessively high demand for foreign currency.
"In the first five days of April, average currency sales per day increased 1.2 times on March," the ministry said.
