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BNP Warns "The Run On Ukrainian Deposits May Have Already Started"

Tyler Durden's picture


"It is absolutely impossible to forecast" Ukraine’s exchange rate, BNP Paribas notes in an ominous report today. Considering Ukraine’s huge need to cover its current account deficit, the country is increasingly reliant on financial inflows - and these will be difficult to secure. The Hyrvnia has collapsed this morninng to 9.00 back near December 2008 lows as BNP warns "The NBU faces a difficult task: let the FX rate devalue to a 'new fair level' without triggering a run on hryvnia retail deposits, which might have already started." Relying on external support amid a forced devaluation "increases risks of disorderly adjustement," and that appears to happening.


Ukraine's currency - the Hyrvnia has collapsed to 9.00 this morning...


BNP's warnings today (via Bloomberg):

It is absolutely impossible to forecast” hryvnia’s exchange rate, BNP Paribas analysts Serhiy Yahnych and Yevgeniy Orudzhev in Kiev write in report today.


Ukraine’s current-account gap, unstable funding and anti-govt protests have “created a dangerous Molotov cocktail, which now seems to turn into a currency crisis:” BNP


“The National Bank of Ukraine conducted only a minor intervention yesterday, which led to increased demand for dollars this morning:” BNP


The NBU faces a difficult task: let the FX rate devalue to a ‘new fair level’ without triggering a run on hryvnia retail deposits, which might have already started. Furthermore, it is forced to conduct devaluation having no external support package, which increases risks of disorderly adjustement:” BNP

BNP comments seem extremely accurate from last year...

... rebalancing of the current account has been virtually zero over the last few months.


Considering Ukraine’s huge need to cover its current account deficit, the country is increasingly reliant on financial inflows. These will be difficult to secure,




We expect FX reserves to nosedive to USD 18bn by the end of 2013, underlining the case for a weaker local currency. Ukraine badly needs to rebalance its current account, with calls for a more flexible (and weaker) FX rate getting louder.

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Wed, 02/05/2014 - 10:56 | 4403816 PR Guy
PR Guy's picture

Yes - the shit is really going to hit the fan when they bail-in all the Ukrainian citizens!! That's the real reason for deposit outflows - those in the know have already been given the hint.


This guy will help them -




Wed, 02/05/2014 - 11:00 | 4403840 Pladizow
Pladizow's picture

How do you say gold in Ukranian?

Wed, 02/05/2014 - 11:05 | 4403866 PR Guy
PR Guy's picture

I can't get the character set right to tell you on this. Look on Google translate!

Wed, 02/05/2014 - 11:07 | 4403885 Pladizow
Pladizow's picture

How do you say rhetorical in Ukranian?

Wed, 02/05/2014 - 11:13 | 4403904 HyBrasilian
HyBrasilian's picture

 "It is absolutely impossible to forecast" Ukraine’s exchange rate"


So ~ Ukraine = Bitcoin? [I guess they have that going for them]

Wed, 02/05/2014 - 11:13 | 4403905 PR Guy
PR Guy's picture

It's the same word. So is 'bail-in'

Wed, 02/05/2014 - 11:20 | 4403936 falak pema
falak pema's picture

Yulia Tymoshenko or your donkey rocks (roxelane)

In Russian rhetoric it is/was : Mikhail Khodorovsky or your donkey is boxed. 

Its a rhetorical tale of two donkeys. One has plaid tails full of vengeance. Guess which one. 

Wed, 02/05/2014 - 11:44 | 4404047 newdoobie
newdoobie's picture

Where's Boris when you need him!

Wed, 02/05/2014 - 12:29 | 4404233 Mountainview
Mountainview's picture

Maybe the boxchamp with a German passport has the answer!

Wed, 02/05/2014 - 12:06 | 4404158 PT
PT's picture

But I thought one of the PIIGS was gonna go first.  What happened?

(Somehow I get the feeling that my ignorance is showing a little more brightly that usual.  Edjukate me.) 

Wed, 02/05/2014 - 11:24 | 4403941 TheGoldMyth
TheGoldMyth's picture

Real gold is a good accounting system. Not the metal itself. Or...the accounting is more valuable than the metal.
Poor accounting corrupts everything else. So we do not need a currency reset, we need an accounting reset.
It is quite broken in an intentional manner.

Wed, 02/05/2014 - 11:29 | 4403963 Levadiakos
Levadiakos's picture

As long as Jamie's bonus is safe, it's all good

Wed, 02/05/2014 - 11:08 | 4403882 TheGoldMyth
TheGoldMyth's picture


By Ellen Brown
Global Research, October 29, 2010
webofdebt.com 29 October 2010

The concept of money-as-a-commodity can be traced back to the use of precious metal coins. Gold is widely claimed to be the oldest and most stable currency known, but this is not actually true. Money did not begin with gold coins and evolve into a sophisticated accounting system. It began as an accounting system and evolved into the use of precious metal coins. Money as a “unit of account” (a tally of sums paid and owed) predated money as a “store of value” (a “commodity” or “thing”) by two millennia; the Sumerian and Egyptian civilizations using these accounting-entry payment systems lasted not just hundreds of years (as with some civilizations using gold) but thousands of years. Their bank-like ancient payment systems were public systems—operated by the government the way that courts, libraries and post offices are operated as public services today.

Wed, 02/05/2014 - 11:11 | 4403894 TheGoldMyth
TheGoldMyth's picture

Accurate means of exchange is the real gold. Like a good accounting system, as Ellen Brown postulates amongst other things. But this first is paramount and is worth more than any other. Nothing else has as much value to preserve wealth and prevent it being corrupted by a faulty accounting system.
In any case, central banks own most of the gold who caused the mess in the first place. Isn't there a conflict of interest here?
Memo to remind myself.

Wed, 02/05/2014 - 11:15 | 4403912 Pladizow
Pladizow's picture

What has a greater chance of being corrupted: Gold or Accounting?

Wed, 02/05/2014 - 11:26 | 4403950 TheGoldMyth
TheGoldMyth's picture

Gold is allready corrupted due to poor accounting

Wed, 02/05/2014 - 11:43 | 4404032 TheGoldMyth
TheGoldMyth's picture

Gold is a stupid store of value. It can purchased in return mirrors and beads in poor countries but can be leveraged 100 times spot price, and resold on Sundays in other countries or by organisations like JPM.

The greatest prize is a good accounting system. If you want a better world economy, get rid of the corrupt accounting practices. If you want more of the same, settle for some physical metal and hire a good astrologer who can tell you when and where to sell it.

It is not rockeeet science, corrupt accounting entries corrupt everything. Including gold, bricks and mortar, and everything else.

Wed, 02/05/2014 - 11:48 | 4404071 Pladizow
Pladizow's picture

"....get rid of the corrupt accounting practices." = Get rid of Humans! - I dont think this will happen

Wed, 02/05/2014 - 11:55 | 4404098 TheGoldMyth
TheGoldMyth's picture

It has been done before and some civilisations lasted thousands of years and did not need to use gold.
As for corruption, speak for yourself mate.

Wed, 02/05/2014 - 12:03 | 4404136 TheGoldMyth
TheGoldMyth's picture

I may as well go off and study my hobby now. LoL
Forensic economic psychiatry, and i will see what i can do for all you doom and gloomers of human nature later.
Human nature does not contain corruption in and of itself, it is aquired, imitated, taught in schools of economics etc.

Wed, 02/05/2014 - 12:10 | 4404173 pods
pods's picture

Holy rainbows Batman.  Lay off the X.


Wed, 02/05/2014 - 12:05 | 4404146 Pladizow
Pladizow's picture

With these agrarian goat herders, where these accounting systems "lasted thousands of years" how complex were their societies and financial systems?

Wed, 02/05/2014 - 12:35 | 4404239 TheGoldMyth
TheGoldMyth's picture

Good grief Pladizow, that is not saying much about their attainments. In any case, science and the practice of the arts is not a homogeneous distribution.  It might be true that most of the ancient peoples might go to a goat herding school, but that does not exclude other diverse schools from existing.
If the accounting systems were of a high enough quality, what need is there for complexity?
Corruption creates complexity and limits quality, whilst destroying value..

Wed, 02/05/2014 - 12:41 | 4404279 Pladizow
Pladizow's picture

OK - So, dont buy gold then, put all your money into Wall St banks and trust that human nature wont fuck you!

Good luck!

Wed, 02/05/2014 - 13:13 | 4404330 TheGoldMyth
TheGoldMyth's picture

Debugas: If gold loses value, the banks are screwed by having so much invested in it. They almost have the monopoly for the first itme in history in my rekoning. Margin calls are not good for anyone so pumping gold is like spruking central bank gold in my opinion and i don't care, it is just me. Solar panels will do fine in my case.

Human nature? Here is one about human nature in the form of an ancient allegory. I don't think anyone knows how old it is.

"There is an Eastern tale which speaks about a very rich magician who had a great many sheep. But at the same time this magician was very mean. He did not want to hire shepherds, nor did he want to erect a fence about the pasture where his sheep were grazing. The sheep consequently often wandered into the forest, fell into ravines, and so on, and above all they ran away, for they knew that the magician wanted their flesh and skins and this they did not like.

At last the magician found a remedy. He hypnotized his sheep and suggested to them first of all that they were immortal and that no harm was being done to them when they were skinned, that, on the contrary, it would be very good for them and even pleasant; secondly he suggested that the magician was a good master who loved his flock so much that he was ready to do anything in the world for them; and in the third place he suggested to them that if anything at all were going to happen to them it was not going to happen just then, at any rate not that day, and therefore they had no need to think about it. Further the magician suggested to his sheep that they were not sheep at all; to some of them he suggested that they were lions, to others that they were eagles, to others that they were men, and to others that they were magicians.

And after this all his cares and worries about the sheep came to an end. They never ran away again but quietly awaited the time when the magician would require their flesh and skins."


Wed, 02/05/2014 - 17:47 | 4405621 bluskyes
bluskyes's picture

There is no price for gold, when it is the currency, and quantities are the unit of account.

Wed, 02/05/2014 - 11:57 | 4404108 pods
pods's picture

You cannot have a good accounting system when there is money to be made from having a poor one.

See the Rothschild empire for an example.

And since trade is global, you now have to have a system in which accounting is "good" across national borders, cultures and languages.

A good prize, but one that cannot happen.  Because there will always be those who play by different rules. 

And if you try and set up a system where there is international control over a system, it will be bought and co-opted before it even starts.

Physical gold has been a store of value due to the scarcity, durability, and the sheer difficulty in digging the shit out of the ground.

Physical gold IS good accounting.  


Wed, 02/05/2014 - 11:17 | 4403920 Debugas
Debugas's picture

yes we all know it - money began with kings issuing "accounting tickets" to their armies and letting soldiers to go around and force local population to accept those tickets as payments in exchange for their goods

Wed, 02/05/2014 - 11:19 | 4403932 TheGoldMyth
TheGoldMyth's picture

Link to earlier post about the same.
By Ellen Brown
Global Research, October 29, 2010
webofdebt.com 29 October 2010

Wed, 02/05/2014 - 12:09 | 4404168 thelibcentury
thelibcentury's picture

And I'm sure she would love to propose one for all of us, thank you so much Ellen!


Personally I tend not to trust people who espouse fascist economics torn right from the pages of the 3rd reich...but thats just me, what do I know?

Wed, 02/05/2014 - 12:43 | 4404284 TheGoldMyth
TheGoldMyth's picture

thelibcentury: Yes you would need to find a quote and actually formulate what you mean.

Wed, 02/05/2014 - 11:37 | 4403974 kralizec
kralizec's picture
Zoloto, suky!
Wed, 02/05/2014 - 17:42 | 4405602 bluskyes
bluskyes's picture

My baba told me that suky was skinny, and ruby was fat. I am ruby, like my baba.

Wed, 02/05/2014 - 11:06 | 4403877 takeaction
takeaction's picture

There we go...Stocks up...Gold down.  Just the way we like it on a "Bad News" day.  Amazing isn't it boys.  Fuck them.

Wed, 02/05/2014 - 11:09 | 4403884 TeamDepends
TeamDepends's picture

Gosh, these free-markets sure are turbulent.

Wed, 02/05/2014 - 12:07 | 4404157 SAT 800
SAT 800's picture

Very droll. Just imagine what they could discover if they "actually" investigated the FX market. OH, LA, LA. but, that's not likely.

Wed, 02/05/2014 - 11:08 | 4403890 BurningFuld
Wed, 02/05/2014 - 11:20 | 4403930 Alpha Dog Food
Alpha Dog Food's picture

Nice cartoon PR Guy - I love it when people take the pi55 out of TED talks. I can't stand the sanctimonious prats.

Wed, 02/05/2014 - 11:26 | 4403956 The Dunce
The Dunce's picture

The Ukranians picked the wrong fight.  They screwed with Putin.  And now he's raping them in the keester.  Putin's a bastard.

Wed, 02/05/2014 - 12:11 | 4404180 PT
PT's picture

If I wanted to know boring shit about food then I'd watch TV.

Wed, 02/05/2014 - 10:56 | 4403819 Millivanilli
Millivanilli's picture

If Ukraine were part of the EU the solution would already be in place-  Bail in, bitchezzz.


Deal reached on bank “bail-in directive” http://www.europarl.europa.eu/news/en/news-room/content/20131212IPR30702... And then they'd riot against brussels! Fuck the bankers!  Buy PMS
Wed, 02/05/2014 - 11:30 | 4403966 Ghordius
Ghordius's picture

are you sure that bankers are happy about that directive? I understood they prefer to be bailed-out, preferably with tax-payer money

though please tell: how should be uninsured deposits be treated in the case of a bankruptcy or near-bankruptcy restructuration? 

remember that when you put money in a bank, it's not yours anymore. you lent it to the bank. it's called... banking

Wed, 02/05/2014 - 11:57 | 4404089 Millivanilli
Millivanilli's picture

And banking is theiving.  There, I  fixed it for you.  First step, naturally, would be to indict, prosecute and execute the banking executives.  Any system that calls safe deposits an investment and pays zero percent interest is theft.  Therefore, that must be corrected poste haste.

Wed, 02/05/2014 - 12:14 | 4404191 PT
PT's picture

And any system that sends my money directly to a third party instead of into my pocket is theft, especially if third party charges me fees to access my money.

Wed, 02/05/2014 - 10:53 | 4403821 Hulk
Hulk's picture

Runs on Deposits, nice softball thrown our way !!!

Wed, 02/05/2014 - 10:58 | 4403833 Sufiy
Sufiy's picture

CNBC: Thomas Demark Calls For Risk of 60% Crash In S&P 500

  Thomas Demark is calling that the next two - three days will be critical and if the markets go down they can unravel very quickly. If today's weak ADP report can be taken as any guidance the coming up Jobs Report can be weak as well. We think that his call is very extreme, but Taper Pause is becoming the reality with every sell off in the market. Thanks to Bernanke, Janet Yellen has her FED Chair Crisis right at the start of her reign. Gold is fighting the gravity and market manipulators at the $1270 level and once it will close above it the mother of short squeeze in Gold will arrive. http://sufiy.blogspot.co.uk/2014/02/cnbc-thomas-demark-calls-for-risk-of...

Wed, 02/05/2014 - 10:59 | 4403835 SAT 800
SAT 800's picture

Under attack by the BOE, ECB, FED; join nato or else !

Wed, 02/05/2014 - 11:04 | 4403851 JustObserving
JustObserving's picture

Another move in the Western play for Ukraine - collapse the currency:

EU and Washington step up pressure on Ukraine

By Peter Schwarz 
4 February 2014


The European Union and the US used last weekend’s Munich Security Conference to massively step up pressure on Ukraine. They are seeking to install a technocratic government pledged to implement harsh economic reforms drafted by the International Monetary Fund, change the constitution, curtail the power of the president and bring the opposition into power.

To achieve their aims they are planning substantial short-term financial assistance for Ukraine, as EU foreign policy chief Catherine Ashton reported. Ashton explained these plans to the Wall Street Journal, which wrote of “the West’s most significant move to date to reopen the geopolitical struggle for Kiev since Ukrainian President Viktor Yanukovych turned his back on an EU economic pact and, instead, signed a deal with Russia for $15 billion in aid.”

In contrast to most other media outlets, the mouthpiece of Wall Street refrained from euphemistic phrases about freedom and democracy and openly admitted the real aim of the Western powers in Ukraine: a “geopolitical contest for influence” and a struggle “to blunt Moscow’s ability to control Ukraine economically and politically.”




Wed, 02/05/2014 - 11:01 | 4403858 newsguy68
newsguy68's picture

A great article on the future of the US....


Money Confiscation And Martial Law Unavoidable In US At This Point 



Wed, 02/05/2014 - 11:03 | 4403859 J S Bach
J S Bach's picture

My God... we must end this world's debt-based monetary system.  There shouldn't even BE any deficits anywhere - with unpayable interest to banks who do nothing but parasitically suck away a country's wealth.  Usury must cease the world over.


*slap slap*


Okay... I'm awake now.

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