KIEV, Dec. 11 - The civil unrest in Ukraine triggered by the government's last-minute U-turn on EU integration and movement towards Russia may exacerbate the country's already significant forex and debt risks, according to Roubini Global Economics (RGE).

"Ukraine's large twin deficits and short-term external debt, inflexible currency and low forex reserves (2.2 months of imports and a third of short-term external debt) make it one of the most vulnerable emerging markets to a currency crisis. This risk has now been exacerbated by the civil unrest triggered by the government’s last-minute U-turn away from the EU integration and towards Russia. Devaluation has so far been avoided mainly due to: (1) positive sentiment of Ukrainian retail depositors, used to depreciation pressure; (2) high costs of hedging for corporates and (3) capital and currency controls. A reversal in sentiment, however, could increase the demand for cash forex and trigger disorderly devaluation in a matter of days," Evghenia Sleptsova, RGE Senior Analyst for Russia and CIS, Country Insights, told Interfax-Ukraine.