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Putin’s threatened invasion is already hitting the Ukrainian economy hard

Mount Equity Group Tokyo Japan > News > Markets > Putin’s threatened invasion is already hitting the Ukrainian economy hard

While the world waits to see if Vladimir Putin will proceed with his threatened invasion of Ukraine, Russia’s menacing military posture is already hitting the Ukrainian economy hard.

As fears over the Russian troop build-up on the Ukrainian border mounted on January 14, yields on Ukrainian sovereign Eurobonds in US dollars suddenly shot up to 11-14 percent. They have since risen even higher. As a consequence, Ukraine has effectively lost access to the international financial market.

This sudden financial shock might appear surprising given the relatively solid status of the Ukrainian economy. Ukraine has accumulated international currency reserves of USD 31 billion, more than it has had at any time since 2011. In 2015, Ukraine’s reserves reached a low of just USD 5 billion.

Thanks to high food and iron ore prices, Ukraine’s hryvnia…

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