Aug. 21 (Bloomberg) -- Ukraine’s 2017 Eurobond declined the most in almost two weeks and the hryvnia weakened as the economy minister resigned, complicating efforts to obtain injections of international aid.
The yield on the dollar note due in July 2017 rose 26 basis points to 10.08 percent by 4:25 p.m. in Kiev, after a nine basis-point increase yesterday. The hryvnia depreciated 0.4 percent to 13.35 per dollar, bringing its decline this year to 38 percent, the second-worst performance among more than 170 currencies tracked by Bloomberg.
Economy Minister Pavlo Sheremeta tendered his resignation yesterday, citing the slow pace of overhauling institutions, as the government seeks to streamline the public sector to get payments from a $17 billion International Monetary Fund package. Ukraine’s military said it continued to push back pro-Russian separatists in the east, where more than 2,000 people have died in the conflict.
“Sheremeta’s comments are disappointing as they suggest that reform efforts are running into difficulties against entrenched vested interests and the old guard,” Timothy Ash, London-based chief emerging-market economist at Standard Bank Group Ltd., wrote by e-mail today. “Discord in the administration is a concern, especially when the country is still at war, and when the IMF is set to consider the release of the next aid tranche.”
The government, which has faced delays on the second, $1.4 billion part of the IMF program, wants to combine the third and fourth tranches into a $2.2 billion disbursement and will need additional cash beyond the IMF aid from donors, Finance Minister Oleksandr Shlapak told reporters in Kiev yesterday.
“The board will be very much concerned making double disbursement without the actual conflict being finished,” Dmitri Petrov, a London-based strategist at Nomura Holdings Inc., wrote in e-mailed comments today.
Thirty-four civilians were killed and 29 hurt in and around Donetsk, one of the main separatist strongholds, over 24 hours, the regional administration said yesterday. Nine servicemen died and 22 were wounded in that period, military spokesman Andriy Lysenko said in Kiev.
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