As opposition party offices are raided and streets continue to fill with protesters, the"precarious" funding sitaution in the nation is beginning to flash red as interbank lending rates spike to 20%. Banks, clearly concerned about their own and each other's liquidity in the face of potential deposit runs (and the accompanying counterparty risk) and huge demand for liquidity. The hryvnia is falling and bond yields are rising but it is the spike in KievPrime overnight rates that is most concerning - and policy-makers have little room to help.
Chart: Bloomberg
Armed men storm Ukrainian opposition offices, US voices concern
December 9, 201312:30PM ETUpdated 3:14PM ET
The offices of jailed opposition leader Yulia Tymoshenko's party were raided Monday in Kiev as protests intensify
Pro-E.U. protesters in Ukraine stand opposite riot police on Monday.Sergei Supinsky/AFP/Getty Images
Masked men with guns in Kiev raided the party headquarters of jailed Ukrainian opposition leader Yulia Tymoshenko and took a computer server on Monday, spokeswoman Natalia Lysova said.
Lysova blamed police for the raid, but the police denied any involvement. Online newspaper Ukrainska Pravda said the raid was the work of the SBU state security service, which was unavailable for comment.
The raid occurred amid heightened tension in the Ukrainian capital after hundreds of thousands of people attended a protest rally on Sunday, which continued Monday, demanding the resignation of President Viktor Yanukovich, Tymoshenko's archrival.
The protesters, gathered in Kiev's Independence Square, are furious with the Yanukovich government for its decision to ditch a landmark pact with the European Union in favor of a trade deal with Moscow, Ukraine's Soviet-era overlord. Scores of riot police were dispatched to the area on Monday, stoking fears of a crackdown.
Yanukovich agreed on Monday to meet with the country's three former presidents to discuss how to end the political crisis. He said the round table would take place Tuesday.
Tymoshenko, whose fiery rhetoric galvanized protesters in the Orange Revolution of 2004 and '05 that denied Yanukovich the presidency then, is serving a seven-year sentence for abuse of office in a case condemned by many in the West as politically motivated.
Ukraine's opposition leaders have called on pro-Europe demonstrators to pressure Yanukovich to sack his government and drop plans for closer ties with Russia.
Also on Monday, U.S. vice president Joseph Biden expressed "deep concern" about the growing violence during a telephone call with Yanukovich. "Violence has no place in a democratic society and is incompatible with our strategic relationship," said Biden, according to a release from the White House.
The latest protests have escalated a weeks-long confrontation between authorities and protesters that has raised fears of political and economic instability in Ukraine, a former Soviet republic home to 46 million people.
Submitted by Tyler Durden on 12/10/2013 08:22 -0500
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