Ukraine warns creditors on moratorium

Ukraine's Finance Minister Natalia Yaresko said that she expects the IMF to release its next $1.7 billion tranche of aid to Kiev in July,

Ukraine warns creditors on moratorium

World Bulletin / News Desk 

Ukraine cannot wait until September to reach an agreement with its creditors to find some $15.3 billion in savings before it is forced to call a moratorium on debt payments, Finance Minister Natalia Yaresko said on Wednesday.

She also repeated that she expects the International Monetary Fund to release its next $1.7 billion tranche of aid to Kiev in July, even if there is no agreement on a debt restructuring by then.

Ukraine's parliament passed a law last month that would allow the government to impose a moratorium on foreign debt payments if necessary.

"I don't think we have that much time," Yaresko told reporters, when asked if debt negotiations could last past the summer. "In that respect, I'd have to use other tools to reduce the pressure on the balance of payments, a moratorium."

Yaresko and Ukrainian Prime Minister Arseny Yatseniuk are in Washington this week to meet with the IMF, promote Ukraine as an investment destination, and ask U.S. officials for more economic and military support.

Kiev has been driven to the edge of default by economic mismanagement and a separatist conflict in the east. Now, as one of the conditions of an IMF-led $40 billion bailout program, it is trying to reach a restructuring agreement with bondholders.

But the two sides have failed so far to see eye-to-eye, with a powerful creditors' committee refusing to offer a writedown on part of the debt which Kiev is pressing for.

"If we're not able to make progress, then the creditors will be provoking the use of that (moratorium)," Yaresko said, adding that the government has already paid some $2 billion in repayments to creditors since last year, despite fighting a conflict in the east.

She declined to say whether Kiev would make its coupon payments to bondholders next week.

The creditors' committee has proposed drawing some $8 billion from Kiev's central bank reserves as part of the restructuring plan, which Yaresko has called "unacceptable." She said such a plan undermines the very purpose of Kiev's economic program from the IMF and other donors, which aims to bolster the level of central bank reserves.

As part of the IMF's $17.5 billion in support, Kiev must still complete three prior actions, including improving central bank independence, before the IMF can release the next tranche of aid. Yaresko said she expects parliament to vote on the measures next week.

Güncelleme Tarihi: 11 Haziran 2015, 11:43