U.S. Treasury discusses providing Ukraine with USD 1 bln loan guarantee

U.S. Treasury Secretary Jacob Lew announced on Nov. 13 that the U.S. government is considering the possibility of providing further loan guarantees worth a total of USD 1 bln to Ukraine, as reported by the Interfax news agency. “We’re working on the provision of the third USD 1 bln of credit guarantees to Ukraine in the coming months,” he told reporters after a meeting with Ukrainian Prime Minister Arseniy Yatsenyuk and Ukrainian Finance Minister Natalie Jaresko.

The U.S. will continue cooperating with Ukraine to support further reforms, Lew said, adding that the country has made considerable progress over the last two years. “It is very important to continue reforms on tax, energy, and to toughen measures to fight corruption,” he said. The USD 1 bln loan guarantee is dependent on Ukraine’s performance under the current IMF program, said Yatsenyuk, as reported by the Cabinet press-service.

Alexander Paraschiy: Though the U.S. government is ready to provide support, further financing will be conditional on the IMF. The IMF mission has arrived to Kyiv on Nov. 12 to start consultations regarding tax reform and the 2016 spending plan. We see these measures as being approved at the end of December, at the earliest. So both the IMF funding and U.S. loan guarantee should arrive in early 2016, which means that gross international reserves will remain close to USD 13 bln, the current level, by the year end.