Ukraine Currency Forwards Slump as Interbank Rates Surge to 20% - Bloomberg:
"Ukraine’s hryvnia slumped to within 0.3 percent of a one-year low in the forwards market on concern policy makers will fail to ward off a devaluation as foreign reserves sink and interbank lending rates soar.
Three-month non-deliverable forwards for the hryvnia fell 0.2 percent to 8.8544 per dollar yesterday, three days after reaching 8.885, which was the weakest level since December 2012, according to data compiled by Bloomberg. The forwards, which investors use to bet on the currency’s direction, traded 7.7 percent weaker than the spot market rate, which rebounded to 8.171 per dollar yesterday.
Ukraine’s foreign reserves plunged 9 percent last month to a seven-year low as President Viktor Yanukovych’s decision to suspend talks on a European Union trade pact in favor of closer ties with Russia sparked nationwide protests. The KievPrime overnight index, which tracks borrowing costs among lenders, jumped to a one-year high of 20 percent yesterday, signaling Ukraine’s efforts to prevent a devaluation are creating cash shortages that could deepen the third recession since 2008."
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