Blue &Yellow: Politics and Economics in Ukraine

Yields on Ukraine’s $105 billion of government and company debt are the highest of any country with dollar-denominated bonds except Ecuador, which defaulted in December. The currency, the hryvnia, weakened 38 percent in the past 12 months against the dollar. The benchmark stock index lost 85 percent in 2008, the biggest drop in the world after Iceland, data compiled by Bloomberg show.

“The market is telling us there is a high probability of a default,” said Tom Fallon, head of emerging-markets at La Francaise des Placements in Paris, which manages $11 billion and sold its Ukrainian holdings six months ago. “It’s an advantage that the country is committed to policy measures that the IMF is prepared to back, but that is no guarantee it won’t default.”