IMF, Ukraine say they’re ready to resume cooperation

Ukraine’s newly appointed Finance Minister Oleksandr Danyliuk said he has made resuming cooperation with the IMF his “number one priority,” according to an interview with the dt.ua news site published on April 15. The IMF is also ready to renew cooperation with the new Ukrainian Cabinet, said on April 15 Poul Thomsen, the director of the IMF’s European department. “We look forward to talk to the new government; we stand ready to continue supporting Ukraine,” he said.

In other news, Russian Finance Minister Anton Siluanov told Interfax on April 16 that he is discussing the cooperation with the IMF on the need for Ukraine to fulfill its obligations the consequences of Ukraine’s default on Russian paper. Recall in late December, Ukraine failed to repay on time USD 3 bln in Eurobonds held by a Russian state fund after the Russian side refused to participate in debt restructuring. The IMF recognized this Eurobond as official debt of the Ukrainian government.

Alexander Paraschiy: The outstanding issue on the Russian debt should not be an obstacle for Ukraine and the IMF to resume cooperation. We still expect the IMF will continue to close its eyes on the issue, provided that Ukraine will show tangible progress in fighting corruption and take upon other commitments stipulated in the IMF’s program. Thus far, we believe IMF cooperation – which will result in a new loan tranche for Ukraine of at least USD 1.7 bln – will resume within the next two months. Nevertheless, we doubt Ukraine will be able to receive USD 5.8 bln from the IMF this year, as budgeted by the previous government. In the best-case scenario, Ukraine could receive two tranches this year, worth up to USD 4 bln.