Ukraine's Post-Civil Crisis Financial Position In 5 Simple Charts

 @gmorcroftg.morcroft@ibtimes.com on February 24 2014 1:42 PM
Ukraine Opposition Indep Sq 21Feb2014
Ukraine opposition rally, Independence Square, 21 February 2014. Reuters

Analysts at UBS, the Swiss banking giant, on Monday post a research report on the precarious position Ukraine now finds itself in after civil unrest has led the president to flee.

"Public unrest and a more violent escalation of Ukraine's political crisis have again called into question the sustainability of Ukraine's external funding position, and thus even the short-term reduction in the country risk premium after the December deal with Russia proved fleeting," the analysts concluded.
 
"The longer the political turmoil persists, the higher the risk that the worst case scenario of a full-blown balance of payments and sovereign debt crisis materialises" they said, adding that, "We think that even if a solution is reached, most scenarios would still involve a lot of uncertainty over 2014-15 – and thus keep the sovereign risk premium volatile and business conditions highly uncertain."
 
The following five charts highlight the difficulties the nation faces over the short term.
 
   ukraine1 FX reserves down to 2 months of imports  Haver, NBU ukraine2 UAH and sovereign risk under pressure  Source: Bloomberg ukraine3 Twin deficits, no growth  Haver, IMF, UBS calculations ukraine4 External debt  Haver, UBS calculations ukraine5 Sovereign debt redemption schedule (principal only)  Bloomberg, UBS calculations

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