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"The approved bill is highly positive for domestic agricultural producers and exporters," said Tamara Levchenko, an analyst at Dragon Capital investment bank.

Reserves fell to $34.95 billion from $38.2 billion a month earlier, the Natsionalnyi Bank Ukrainy, based in the capital Kiev, said today in astatement on its website. The NBU spent about $1.1 billion last month to satisfy increasing public demand for foreign currency, according to Olena Bilan, chief economist at Kiev-based Dragon Capital.

Tomas Fiala, EBA president and CEO of Dragon Capital, agreed. "We don’t see any progress in establishing contacts with bureaucratic system," Fiala said. "State agencies’ pressure on business increased this year."

Oleksandr Makarov, an analyst at Kyiv-based investment bank Dragon Capital, is skeptical about the new system. Makarov thinks the best way to fight transfer pricing is implementing indicative prices, based on the world stock exchange, and to force all exporters to abide by the same rules. Instead, Makarov said, the tax authorities want to keep their powers - arbitrary and otherwise - over businesses.

A competing draft law was registered in parliament on Oct. 4, which proposes to reduce export duties for wheat, corn and barley to 3 percent and impose the same tariff on rapeseed and sunflower oil. Analysts at investment bank Dragon Capital said this could be "highly positive" for producers and lead to an increase in exports.

Tomas Fiala, Chief Executive Officer, Dragon Capital EBA President: Three months ago, when announcing a flat reading of the 2Q Index, we voiced fears that a correction was on the cards for 3Q as we observed a slowdown in reforms, very few tangible results trickling down to business from recently approved laws and little progress being made on the most pressing issues including the rule of law, corruption, deregulation, and fiscal pressure. Unfortunately, the final figure came in much worse than anticipated, depressing the Index to levels last seen in the recession year of 2009. A deteriorating international environment also played a role, obviously, and we do not expect it to improve any time soon. Under the circumstances, there remains very little room for further policy errors.

“Chief advisor to National Bank of Ukraine governor Valeriy Lytvytskiy was quoted as saying yesterday that the international reserves stood at $35 billion as of the end of September, which implies a sharp month-on-month drop of $3 billion. Such a drop in reserves seems severe,” Kyiv-based investment bank Dragon Capital said in an Oct. 5 note to investors.

According to a forecast by the chief economist of the investment company Dragon Capital, Olena Bilan, the prices for steel (Ukraine’s main export product and an important factor in the stability of national currency) in the current year will fall by 15-20 percent.

Brian Best, head of investment banking at Dragon Capital, which acted as lead manager on the IPO, told the Kyiv Post that in the final stages of the IPO process the company found itself at a crossroads, knowing that better market conditions would allow it to raise more money. In retrospect, however, the company was satisfied it hadn’t stalled, he added.

"If the NBU continues its stringent monetary policy, the rise in the interest rates on short-term hryvnia deposits of up to three months will increase by 1-1.5 percentage points and loans will become more expensive for borrowers," says Anastasia Tuyukova, an analyst at Dragon Capital.