IMF reaffirms Ukraine support even if moratorium imposed
30 July 2015
The IMF plans to continue supporting Ukraine disregarding a debt moratorium that might be imposed, Managing Director Christine Lagarde told a July 29 press briefing. “We are encouraged that that negotiation is making progress” Lagarde said. If it didn’t work out, “despite the encouraging progress recently made”, then there is the possibility of a legislative process “that institutes a debt moratorium.”
The Fund hopes the moratorium will not be imposed, but in that event, the IMF has a policy of lending into arrears. “We will apply that policy, which allows us to continue supporting Ukraine despite that situation,” Lagarde said. The Fund’s first review of the EFF program with Ukraine will be conducted on July 31, she confirmed.
Alexander Paraschiy: Amid concerns on debt negotiations’ progress the Fund one more time confirmed that the second wire for Ukraine is almost secured. This statement tells us nothing about probability of imposing debt moratorium; however, it promises sufficient foreign currency inflow to cover external accounts needs and build up gross international reserves. The decision to pay or not pay, the IMF allegedly leaves to Ukraine what still preserves pressure on creditors even after USD 120 mln coupon was paid on July 24. The next sovereign coupon, USD 60 mln on 2021 notes, is scheduled for August 23.
