Ukraine's currency reserves crumble to lowest level since 2005

Ukraine's foreign currency reserves have plunged to their lowest level since 2005 as the country's central bank paid off outstanding debts to Russian energy giant Gazprom.

Ukraine made a payment of $1.45bn (£924m, €1.17bn) to the state-run gas giant, as agreed under a deal to resume gas deliveries to Kiev. Gazprom had cut off gas supplies to Ukraine in June amid an ongoing price dispute and the stubborn pro-Russian insurgency in eastern Ukraine.

The fighting in eastern Ukraine has decimated the country's economy and plunged Kiev into recession and left its government relying on major assistance from foreign donors.

Foreign currency reserves fell to $9.97bn in November, down from $12.6bn in October, the central bank has said.

Kiev had agreed to pay a total of $3.1bn to Gazprom before the end of the year, meaning that the central bank's reserves could potentially dip to around $8bn.

Volatility in the east of the country has worsened the economic decline brought about by a political crisis that saw former president Viktor Yanukovych flee the country in February.

Ukraine's hrynvia currency has declined accordingly, losing almost half of its value against the dollar this year, making it the world's worst-performing currency.