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The East: Securities Firm Assesses Currency Risks

Prague, 21 October 1997 (RFE/RL) - A report by researchers at a prominent international securities firm says that the East European countries most vulnerable to a currency crash in the next 12 months appear to be Bulgaria, Romania, and Ukraine.

The report by Deutsche Morgen Grenfell also says that there is moderate risk of a currency depreciation in Slovakia, the Czech Republic and Russia.

The study is an attempt to establish a method of ranking currency risks in Eastern European countries. Deutsche Morgen Grenfell analyst Andrea Burgtorf said that although the methodolgy showed Bulgaria to be at the highest risk of a currency crash, the actual risk in Bulgaria is not so great because of the currency board regime established in July.

Jurgen Conrad, an analyst with Deutsche Bank Research, told RFE/RL that the most important factor affecting currency risk in Ukraine is Kyiv's current fixed exchange rate regime. Conrad said that the government could lessen the risk factor by announcing the implementation of a currency corridor for next year, which would allow the currency to fluctuate within preset limits.