Ukraine’s debt is poised to extend declines as investors
are underestimating losses in the country’s planned debt
reorganization, analysts at Goldman Sachs Group Inc. and
JPMorgan Chase & Co. said on Friday in separate reports.
“Ukraine is bankrupt and the only reason the bonds are
trading at 40-45 is because of IMF involvement,” Dmitri
Barinov, a money manager who oversees $2.6 billion of emerging-market bonds at Union Investment Privatfonds GmbH in Frankfurt,
said by e-mail on Monday. “Ukraine has neither the possibility
nor the willingness to pay its debt, but will be forced to
restructure under IMF conditions.”
The hryvnia’s 51 percent depreciation against the dollar
this year, following a 48 percent drop in 2014, is driving up
the prices of imports and energy, while making external debt
payments more difficult for Ukraine. Gontereva yielded control
of the currency earlier this month, allowing it to weaken in an
IMF-backed move which helped eliminate an unofficial street
market for currency transactions.
“The National Bank of Ukraine has few options, with the
West still dragging its feet over financial support,” Ash, the
chief emerging-markets economist at Standard Bank in London,
said by e-mail.