Thursday, January 15, 2015

Russian news: Ukraine's Looming Default – Result of Self-Destructive Maidan Policies - Russia Insider

The economic situation in Ukraine continues to deteriorate.

Incensed that Ukraine’s proposed budget makes no provision to repay the $3 billion loan Russia made Ukraine last year the Russians are now threatening to call it in.

In the meantime the Ukrainian central bank’s reserves have fallen to just $7.5 billion - enough to cover just 5 weeks’ imports.

As the Financial Times is reporting (see below), there is no agreement on providing Ukraine with the extra $15 billion the IMF says it needs to get through the next few months.

The risk of a sovereign default is increasing by the day and unless Ukraine’s western supporters decide soon to put up far more money than they have shown any willingness to do up to now a sovereign default looks like a case of when not if.

Ukraine’s economic position was already bad before the Maidan coup but contrary to what Timothy Ash of Standard Bank says (see the Financial Times piece below) the Ukrainians are very much the authors of their problems.

Immediately prior to the coup Ukraine’s former President Yanukovych had negotiated a $15 billion loan from Russia on very favourable terms and had secured Russia’s agreement to a very substantial discount on the gas Ukraine was importing from Russia.

Complete story at - Russian news: Ukraine's Looming Default – Result of Self-Destructive Maidan Policies - Russia Insider

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