The International Monetary Fund faces a fresh debacle as Ukraine burns through an $17bn rescue package agreed in April and spirals into a full-blown currency crisis, with credit markets already bracing for likely default.
The country's foreign reserves have dropped to $12.6bn, barely enough to cover six weeks worth of imports. Its currency has been in freefall since it became clear that the Minsk ceasefire deal with rebels in the Donbass region was breaking down.
The Hyvrnia has crashed 20pc against the dollar over the past week and has lost almost half its value this year, making it much harder for Ukrainian companies, banks and the state to service $60bn of foreign debt, mostly in dollars.
The economy is expected to contract by 10pc this year, twice what the IMF expected when it first approved the bailout. Ukraine still has another $10bn of IMF aid to come but the pace of disbursements is too slow to keep the country afloat.
Ukraine is in such dire straits that officials are holding back on pre-payments to Russia for gas imports, keeping their fingers crossed that the warm weather will last long enough for Ukraine to make it through the winter, relying on gas stocks and limited flows from Slovakia and Poland through “reverse pipelines”. This is a risky strategy since climate experts are predicting the coldest winter in more than 30 years.
Complete story at - Russian news: Ukraine Braces for Default - Russia Insider
The country's foreign reserves have dropped to $12.6bn, barely enough to cover six weeks worth of imports. Its currency has been in freefall since it became clear that the Minsk ceasefire deal with rebels in the Donbass region was breaking down.
The Hyvrnia has crashed 20pc against the dollar over the past week and has lost almost half its value this year, making it much harder for Ukrainian companies, banks and the state to service $60bn of foreign debt, mostly in dollars.
The economy is expected to contract by 10pc this year, twice what the IMF expected when it first approved the bailout. Ukraine still has another $10bn of IMF aid to come but the pace of disbursements is too slow to keep the country afloat.
Ukraine is in such dire straits that officials are holding back on pre-payments to Russia for gas imports, keeping their fingers crossed that the warm weather will last long enough for Ukraine to make it through the winter, relying on gas stocks and limited flows from Slovakia and Poland through “reverse pipelines”. This is a risky strategy since climate experts are predicting the coldest winter in more than 30 years.
Complete story at - Russian news: Ukraine Braces for Default - Russia Insider
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