Kremlin is in a 'weak' position amid Ukraine war says MP
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The statement came a day after Kyiv requested its international creditors, including Western powers and the world’s largest investment firms, to freeze payments for two years so it could focus its dwindling resources on the war with Russia. The delay was quickly backed by major Western governments and heavyweight funds that have lent to Kyiv.
Mr Butsa told a conference arranged by the Kyiv-based Centre of Economic Strategy think tank: “We are also talking to international financial institutions.
“The legal approaches could be different.
“It’s a little early to talk about the mechanics, but we discussed these issues with these creditors and our thinking is going in this direction.”
Ukraine has secured preliminary agreement from government creditors and bondholders to suspend debt repayments from August 1 until at least the end of 2023, as it struggles to plug a budget deficit running at $5bn (£4.18bn) a month.
Mr Butsa noted that in 2022, Ukraine was on paper set to pay the International Monetary Fund more than it would receive. Arranging a new IMF program was not possible given the current circumstances, he said.
He said: “We are talking with the IMF and other partners about what the solutions might be. We need liquidity from the IMF to replace these outflows.”
According to Financial Times, Bilateral lenders including Germany, the UK and the US on Wednesday said payments would be suspended from next month and they would “strongly encourage” private bondholders to do the same.
Simultaneously, Ukraine’s government said it would invite holders of the country’s eurobonds and other debt instruments to agree to similar terms.
It said it had already received “explicit indications of support” from a group of institutional investors including BlackRock, Fidelity International, Amia Capital, Gemsstock and others.
The official creditors said suspending payments would provide “substantive support for the government and people of Ukraine” as the country “defends itself against Russia’s unjustified, unprovoked and illegal war of aggression”.
The group of creditors includes Canada, France, Germany, Japan, the UK and the US.
They said the suspension of repayments would last until the end of 2023 “with the possibility of an additional year”.
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A spokesperson declined The Financial Times to say what value of repayments would be suspended.
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