The latest data from Ukraine shows its hard currency reserves fell $2 billion over November to $18.9 billion. That’s perilously low by any measure. (Check out this graphic showing how poorly Ukraine’s reserve adequacy ratios compare with other emerging markets: http://link.reuters.com/quq25v)

Central banks often have tricks to temporarily boost reserves, or at least, to give the impression that they are doing so. Turkey, for instance, allows commercial banks to keep some of their lira reserve requirements in hard currency and gold. Others may get friendly foreign central banks to deposit some cash. Yet another ploy is to issue T-bills in hard currency to mop up banks’ cash holdings. But it may be hard for Ukraine to do any of this says Exotix economist Gabriel Sterne, who has compared the Ukraine national bank’s plight with that of Egypt.

Ukraine and Egypt have both balked at signing up to IMF loan programmes because these  would require them to cut back on subsidies. But latest data shows Egypt’s reserves have risen to $17.8 billion from just over $10 billion in July, while Ukraine’s have declined from $22.9 billion. Egyptian import cover has also risen to 2.6 months while Ukraine now has enough cash to fund less than 2 months of imports (Back in July it was 3 months)
Sterne says:

In Egypt, there is more scope for authorities to issue dollar T-bills to mop up dollars. But Ukrainian commercial banks’ net foreign assets are negative, in contrast with Egypt.

He estimates that as of September, Ukrainian commercial banks’ net foreign assets — the value of their overseas assets, minus the value of their  assets owned by foreigners — at minus $8 billion (they own $16 billion worth of overseas assets while their liabilities amount to $28 billion. Egyptian private banks, on the other hand, have a net foreign position of $2.4 billion and are therefore in a better position, Sterne says.  As we point out here, Ukraine’s central bank has been leaning on commercial banks to cough up dollars but given their own position, this may not get too far.