Ukraine state debt grows 1.4% in July

Ukraine’s state debt grew 1.4% m/m (USD 1.0 bln) to
USD 76.1 bln in July on the back of a UAH 22.5 bln state bond issue to
recapitalize the nationalized Privatbank, as well as USD 180 mln in state
guarantees on an EBRD loan. Hryvnia strengthening also added to the stock of
USD-denominated state debt as the national currency appreciated 0.7% to UAH 25.9/USD in July. In UAH terms, state debt also
grew, but at a slower pace of 0.7% to UAH 1.97 trln. The share of external debt
dropped to 64.0% from 64.3% in the prior month.

Alexander Paraschiy: No
surprises for July as budget targets are being filled and debt operations are
sluggish. In August, Ukraine has already repaid nearly USD 360 mln in debt to
the IMF. Nearly USD 520 mln will be disbursed to the Fund in November-December,
resulting in USD 880 mln in total repayments for 2017. We expect a USD 1.0 bln
wire from the IMF to offset those disbursements, as well as a USD 0.5 bln
Eurobond placement. All in all, we expect state debt to be at 76.3 bln (75.0%
of GDP) at the year end.