Ukraine’s government receives USD 2 bln loan from Russian VTB
11 June 2010
UNIAN news agency reported yesterday that Ukraine’s government received USD 2 bln loan from Russian VTB bank for half a year (with prolongation option for up to two years) at 6.7%. On top of that, chief advisor to the NBU Head, Valeriy Litvitsky said yesterday that the NBU’s FX reserves grew to USD 28.5 bln, which is USD 1.8 bln higher than at end-May, indirectly confirming the receipt of such a loan by Ukraine. According to UNIAN, Ukraine’s officials neither confirmed nor refuted the information on the loan. Mykyta Mykhalychenko: It looks now like the purpose of the USD 2 bln loan we reported on earlier is to cover general budget needs rather than to fund infrastructure projects. It is definitely positive news for Ukraine given the procrastination of negotiations with the IMF (government counts on USD 2 bln of IMF money to directly spend for fiscal deficit financing, according to the Budget 2010 law) and difficulties with placing sovereign Eurobonds due to adverse market conditions currently. The loan will enable the government to cover current cash needs, including domestic UAH debt repayments due in June-July (UAH 4.5 bln or USD 0.6 bln).
