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Wednesday, February 26, 2014 12:36 PM

Ukraine Hryvnia Down 17% in Two Weeks as Run on Banks Intensifies; 7% of Bank Deposits Withdrawn in 3 Days

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Ukraine's currency, the Hryvnia, has fallen nearly every day for two weeks straight.

US$ vs. Hryvnia

On February 13 the Hryvnia went for 8.41 to the US dollar. Today it sells for 10.15 to the US dollar. That is a decline of 17.14% in two weeks.

Ukraine Seeks Help From IMF

Reuters reports Ukraine Asks IMF for Help on New Financial Aid Program

Ukraine has asked the International Monetary Fund to help prepare a new financial aid program, its central bank chairman said on Wednesday, adding that the new government would soon have its own anti-crisis program ready.

Stepan Kubiv [Ukraine's new central bank head] told reporters the bank was taking measures to stop capital flight from Ukraine, which has spiraled since protesters took to the streets in November against President Viktor Yanukovich's rejection of an EU trade deal.
7% of Bank Deposits Withdrawn in 3 Days

CNBC reports Risk of a Bank Run Heightens in Ukraine
Fears of a bank run in Ukraine are rising, as central bank reserves sink and some 7 percent of bank deposits were lost in just 3 days.

Yuriy Dyachyshyn AFP Getty Images

Ukraine's reserves currently sit at $15 billion, according to the country's newly appointed central bank governor, Stepan Kubiv. Kubiv said 7 percent of deposits, or 30 billion hryvnias ($3.3 billion), were lost between February 18-20, when the violence in the country reached its zenith and snipers opened fire on protesters.

Goldman Sachs has estimated the country's foreign currency reserves have declined to $12 - $14 billion.

The slump also hit the Russian rouble, which hit a fresh five-year low versus the dollar.

The lead sentence in the above article is a bit curious. A run on Ukrainian banks has clearly started. The fear is not that a run starts, but rather that it does not soon stop.

Mike "Mish" Shedlock

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