Ukraine’s search for foreign aid is being made more urgent by a projected surge in debt repayments in both June and September.
The CHART OF THE DAY shows the junk-rated nation’s foreign-currency debt schedule over the next 12 months, including obligations of state-run energy company NAK Naftogaz Ukrainy, which are guaranteed by the government, and money owed to the International Monetary Fund. Ukraine owes about $13.6 billion over the next 12 months.
The interim government that replaced President Viktor Yanukovych following his ouster last week estimates it needs as much as $35 billion in foreign aid over the next two years. The nation’s international reserves dropped to an eight-year low of about $15 billion this month as central bankers burned through dollars to prop up the currency amid deadly street protests that toppled Yanukovych’s government.
“Ukraine needs external financing soon and it needs to be large,” William Jackson and Liza Ermolenko, London-based emerging-markets economists at Capital Economics, wrote in an e-mailed report yesterday.
The hryvnia weakened past 10 per dollar for the first time yesterday as the central bank pulled its support to stop the loss of reserves. It has slumped 19 percent in 2014, the worst performance among currencies tracked by Bloomberg.
U.S. and European Union officials signaled their interest in providing financing to the new Ukrainian government this week, while Russia suspended a $15 billion loan accord that it signed with Yanukovych’s administration in December.