Wednesday, December 10, 2014

Ukraine's Reserves Plunge 20% In One Month, Drop Below $10 Billion To Lowest In A Decade | Zero Hedge

Things for Ukraine are going from bad to worse.

Following the revelation that Ukraine's sovereign gold has mysteriously been Corzined, following a stunning admission by central bank governor Valeriya Gontareva on primetime TV that "in the vaults of the central bank there is almost no gold left. There is a small amount of gold bullion left, but it's just 1% of reserves" which however left many questions unanswered and which led to prompt legal action against the central bank governor who is being charged with criminal abuse of power and misuse of office under Article 364 of the Criminal Code of Ukraine, one would think that at least Ukraine's dollar reserves would have increased by a modestly proportional, if not market equivalent, amount.

Alas that is not the case.

As the central bank reported overnight, the country's foreign-currency (and gold reserves) dropped by over 21% in one month, to under $10 billion in November for the first time in nearly a decade due to large payments for debt and gas, from $12.6 billion to $9.966 billion.

The reason for the drop per the CB:
  • A reduction of $1.45 billion due to the need to remit a portion of funds that Naftogaz of Ukraine has set aside in a restricted account with the National Bank of Ukraine in order to settle gas bills and arrears with Gazprom OJSC for natural gas imported in November-December 2013 (it remains to be seen if Gazprom confirm receipt or if the funds were merely wired... somewhere).
  • A reduction of $897 million due to repayment and service Ukraine's foreign currency debt obligations, including the installment due to the IMF.
  • Lastly, a reduction of $573 million as a resyult of intervention in the foreign exchange market.
Complete story at - Ukraine's Reserves Plunge 20% In One Month, Drop Below $10 Billion To Lowest In A Decade | Zero Hedge

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