Ukraine: currency crisis seems a bigger threat than debt default

The recent escalation of political protests in Kiev has put Ukraine's fragile external position back in the spotlight. A full-blown balance of payments crisis remains a real risk. The one crumb of comfort is that the threat of a sovereign default is perhaps lower than is commonly perceived. If push comes to shove, we suspect that some form of external assistance, be it from Russia or elsewhere, would allow Ukraine to continue servicing its external debt obligations.