Ukraine's FX reserves to fall further, adding to debt pressures | Business Recorder

Ukraine's FX reserves to fall further, adding to debt pressures | Business Recorder:

"Ukraine's foreign currency reserves are likely to fall this year to their lowest level since 2006 because of its trade deficit and external debt repayments, a Reuters poll shows, contradicting the official forecast. The former Soviet republic's shrinking reserves have made creditors concerned about its ability to meet its debt obligations without International Monetary Fund support.

In June the reserves shrank to $23.2 billion, hardly covering three months of imports, from $24.5 billion, after the government repaid a $1 billion Eurobond without borrowing fresh money abroad. The poll predicts reserves will fall by 16 percent this year to $20.7 billion. "In August-December the government and the central bank must repay $4 billion in foreign-currency debt. If the government fails to refinance it, the money will be withdrawn from reserves," said Olexiy Blinov of Alfa Bank (Ukraine). "

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