A Russian bailout that Ukrainian president Viktor Yanukovich brokered last month appears to have propped up Kiev’s fragile currency and central bank reserves that were dwindling last year amid weak demand for Ukraine’s exports and a recession that was triggered, in part, by lack of reforms.
But the bailout has not stabilised the situation on Kiev’s streets.
Anti-government protests that erupted after Yanukovich’s surprise U-turn from EU integration towards Moscow have continued for almost two months now – albeit in numbers smaller than December’s crowds of hundreds of thousands.
It was in December that Ukraine received the first $3bn tranche of a Russian bailout valued at $20bn, including $15bn in bond purchases, loans and a 30 per cent discount on imports of Russian natural gas.
Last weekend, officials revealed that end-December reserves at the National Bank of Ukraine stood at $20.4bn. That’s an 8.6 per cent month-on-month increase but still only enough to cover 2.5 months of imports.