Benn Steil

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Was Ukraine Tapered?

by Benn Steil and Dinah Walker
February 25, 2014

ukraine

For Ukraine’s beleaguered bond market, the seminal event of 2013 was Ben Bernanke’s now-famous taper talk of May 22.  As today’s Geo-Graphic shows, it sent yields soaring to levels they never came back from.

Ukraine was uniquely susceptible to taperitis, having been sporting a current account deficit of 8% of GDP—considerably worse than other big victims such as India, Brazil, Indonesia, Turkey, and South Africa.  Its current political crisis clearly has deep roots, yet it is interesting to speculate as to whether Yanukovych could have held on had it not been for the country’s spiraling debt costs—sent spiraling by the Fed last May.

International Monetary Fund: Executive Board Assessment of Ukrainian Assistance
Financial Times: Yanukovich and Putin Shake On It
Wall Street Journal: EU, U.S. Rush to Stabilize Ukraine After Ouster
The Economist: A Tale of Two Countries

 

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Read about Benn’s latest award-winning book, The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order, which the Financial Times has called “a triumph of economic and diplomatic history.”

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