Ukraine: a few charts to bear in mind | beyondbrics:
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While the focus in Ukraine has turned to government formation, Russia’s response, and chase-the-president, it’s worth keeping an eye on some of the economic charts.
Here’s a run down.
1) The exchange rate
Another big devaluation on Tuesday, with the hryvnia now down to 9.7 to the dollar, a fall of 6 per cent. The formerly tightly-managed currency is normalising quickly, though it could still have far to fall.
Analysts think the hryvnia could slide as low as 11 or even 12 to the dollar. As Chris Weafer of Macro Advisory said in a note, “a level closer to 12.0 against the US$ is more realistic given current circumstances”.
Source: Reuters
2) Foreign exchange reserves
Russia’s bail out cash looks like a small blip on this chart from the IIF, which estimates that foreign exchange reserves may fall as low as $12bn by end-February.
Source: IIF
From the IIF:
Foreign exchange reserves fell precipitously to as low as $16 billion, or just two months of imports at the end of January. Reserves fell despite the accumulation of another $0.6 billion in payment arrears to Gazprom for natural gas imports from Russia since the start of 2014. Recent partial data suggest that reserves may have fallen further to perhaps $12 billion by late February as deposit withdrawals have accelerated sharply and demand for foreign exchange by residents has surged. The deferral of the second $2 billion disbursement of the Russian $15 billion bailout initially planned for late January and a slew of rating downgrades that have put Ukraine’s sovereign credit rating at a near-default level have led to a further increase in risk premia, with CDS spreads well above 1,000 bps and sovereign spreads at 800-900 points.
3) Trade partners at risk
Handy chart from Nomura:
Source: Nomura
The black and grey dots show how much each country matters to Ukraine; the pink and red bars show how much Ukraine matters to each country. There’s no getting away from the significance of Russia, both ways.
4) Russia’s gas
These two charts from Commerzbank show the EU’s reliance on Russian gas, and how it gets there.
Source: Commerzbank
As analyst Simon Quijano-Evans notes:
a complete stop to Ukrainian transit gas from Russia could only be compensated by around half, mainly through an increase in flows through the Nord Stream pipeline that goes to northern Germany from Russia. That is, of course, assuming Russia continues to supply gas to the EU.
5) Bank exposure
Who’s been lending to Ukraine? In this chart from Commerzbank, Austrian and Italian banks stand out as clearly the most exposed.
Source: Commerzbank
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