Ukraine Devaluation Bets Still On After Russian Aid Pledge - Bloomberg

Ukraine Devaluation Bets Still On After Russian Aid Pledge - Bloomberg:

"Ukraine’s hryvnia stands an even chance of depreciating 11 percent to a record low in a year, even as a $15 billion bailout pledged by Russia this week boosts the government’s ability to avoid default.

There is a 52 percent probability the currency will within 12 months drop beyond 9.29 per dollar, the weakest close set in February 2009, according to derivatives data compiled by Bloomberg yesterday. The probability fell from 84 percent on Dec. 16 as Russia’s bailout plan reduced the cost of insuring Ukraine’s debt against non-payment to a five-month low yesterday.

While Russian President Vladimir Putin’s aid is enough to cover Ukraine’s financing needs through next year, the country is still grappling with a record current account deficit and an economy mired in a third recession since 2008. Foreign-currency reserves dropped to a seven-year low as street protests opposing the government’s ties with Russia roiled Kiev for four weeks."

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