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Another Worry to Plague Ukraine: Bank Runs

<p>The central bank is considering providing loans to five of the country's banks, according to analysts, to prevent a bank run.</p>
Fears of a run on banks rose in Ukraine as central bank reserves sank.
Fears of a run on banks rose in Ukraine as central bank reserves sank. A man looks at an announcement at a closed Bank branch in central Kiev on February 24, 2014.LOUISA GOULIAMAKI / AFP - Getty Images
/ Source: CNBC.com

Fears of a bank run in Ukraine are rising, as central bank reserves sink and some 7 percent of bank deposits were lost in just 3 days.

Ukraine's reserves currently sit at $15 billion, according to the country's newly appointed central bank governor, Stepan Kubiv. Kubiv said 7 percent of deposits, or 30 billion hryvnias ($3.3 billion), were lost between February 18-20, when the violence in the country reached its zenith and snipers opened fire on protesters.

Goldman Sachs has estimated the country's foreign currency reserves have declined to $12 - $14 billion.

The central bank is considering providing loans to five of the country's banks, according to analysts, to prevent a bank run – when a large number of customers withdraw money simultaneously, increasing the likelihood of the bank running out of funds.

Reuters reported later on Wednesday that the central bank was taking measures to stop capital flight from the country.

Bank run fears mean some financial institutions operating in Ukraine closed branches and imposed limits on cash withdrawals earlier this week - some of which have since been lifted.