Ukraine ranks third in the world in terms of bankruptcy risk, – Die Welt
Berlin - Kyiv, November 21 (PolitNavigator, Vasily Ablyazimov) - On the first anniversary of the Maidan, the IMF reports, writes the German Die Weltthat Ukraine sold two-thirds of its gold and foreign exchange reserves in a month and a half.
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According to the latest data from the IMF, the level of precious metal in NBU vaults has reached its lowest level since 2008. According to the Fund, Ukraine sold at least 14 tons of gold during the month, while the total amount was 26 tons.
Ukraine, writes a German newspaper on the anniversary of the Maidan, is on the verge of national bankruptcy, it is completely dependent on foreign loans and owes Russia a significant amount for natural gas supplies. The currency has lost more than 80 percent of its value this year against the dollar.
Gold sales show, Die Welt believes, how close Ukraine is to the brink of bankruptcy. The country appears to be in urgent need of cash to meet government bond repayments. By the end of this year alone, the government in Kyiv will need $550 million to repay the debt bonds alone.
The newspaper notes that in October the same Russia increased its gold reserves by almost 19 tons and brought them to 1168 tons. This is the fifth largest volume in the world, according to the IMF.
In addition, many banks and companies are in dire need of foreign currency. Experts expect that Ukraine's GDP will fall by 8-10 percent this year, that is, twice as much as the IMF predicted. Overall, firms, financial institutions and the government owe about $60 billion.
Ukraine created a short-term liquidity buffer by selling gold in order to regulate gas supplies. Meteorologists are predicting one of the harshest winters in three decades. The sale of gold was needed to pay part of the debt for gas.
The yield on one-year Ukrainian bonds is reduced by 25%. Credit markets are in distress. With a 64 percent probability of bankruptcy, Ukraine ranks third in the world after Argentina and Venezuela. For example, for Germany the risk of default is 1,7 percent, for Russia this figure is 17 percent.
Unlike Euro-member Greece, Ukraine is not an economically systemically important country, the bankruptcy of which will drag the financial and banking systems of Europe into the abyss, the publication states. And most of the $60 billion foreign debt is in the hands of a private organization called the IMF. Thus, Ukraine can only hope that it will be politically relevant to the Western system - and therefore survive.
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