Foreign currency reserves at the National Bank of Ukraine fell by $1.1bn to $21.7bn, according to figures released on Friday.
This brings the year-to-date decline in central bank stockpiles to nearly 12 per cent and dangerously below three months of imports at a time when Ukraine is in the middle of an escalating trade row with Russia.
Officials were not immediately available for comment.
“We are at that point now where reserves are getting to a level where they can slip into a downward spiral,” said Nick Piazza, the chief executive of Kiev-based SP Advisors, an investment house.
Ukraine is one of the worst-hit countries in the developing world, where capital outflows and currency market interventions cut emergency reserves by some $81bn since early May amid talk of quantitative easing tapering by the US Federal Reserve.
Dragon Capital said Ukraine’s reserves dropped in August mainly because of debt redemptions.
But the Kiev-based investment bank warned that central bank interventions aimed at stabilising the hryvnia could further deplete coffers in coming months and described “tensions with Russia” as an added macroeconomic risk.
“The government is going to have to take very serious steps to stabilise things,” Mr Piazza said.
“You can always raise debt, but that would be an expensive option. It’s time to bite the bullet and go back to the table with the IMF.”
Ukrainian officials have in recent months talked of landing a fresh $15bn IMF bailout to reboot its ailing economy.
But they staunchly oppose the Fund’s main condition of reducing unsustainable subsidies on household natural gas prices.
Speaking ahead of an IMF mission to Kiev this autumn, a Fund spokesman said Ukraine “needs to reduce its fiscal and external current account deficits, and launch energy sector and banking reforms, in order to maintain macroeconomic stability and to create the conditions for sustained economic growth”.
Multibillion-dollar IMF loans kept Kiev’s economy afloat in the wake of the 2009 global recession, during which economic output sank 15 per cent.
But the Fund froze its funding in 2011 due to what it said were inadequate attempts at reform.
Ukraine’s economy slipped into a milder recession late last year and Kiev is struggling to cover its foreign debt payments.
They are also feeling geopolitical pressure from Russia, which is threatening to reduce trade ties with Ukraine if it signs an EU free trade pact this autumn.
Bankers estimate that a protracted trade dispute could cost Ukraine 1 per cent of GDP growth.