Ukraine

Ukraine struck a deal with creditors that could save it more than $11 billion over the next three years, a boost for the war-torn country as it scrambles to keep funding the war with Russia, the Wall Street Journal reported. The preliminary deal, unveiled Monday, came after months of contentious negotiations with a committee representing Western bondholders such as BlackRock and Pimco, which had balked over how much debt relief Ukraine and its Western backers were requesting.

Ukraine and its international bondholders started a new round of official talks on restructuring more than $20 billion of debt as Kyiv is running out of time to reach an agreement or face the risk of a potential default, Bloomberg News reported. The east European nation, fighting against Russian aggression, is under pressure to agree a debt overhaul with its creditors as a freeze on payments — agreed two years ago after Moscow’s full-scale invasion — is set to expire on Aug. 1.

The International Monetary Fund cut its growth forecast for Ukraine, as Russian strikes on its power infrastructure drag on the nation’s economy, and said talks with bondholders are “intensifying” as a repayment deadline nears, Bloomberg News reported. That outlook came alongside the Washington-based lender’s final approval Friday to release $2.2 billion from Ukraine’s $15.6 billion aid package, an expected step after agreeing to terms late last month. This is the fifth tranche Ukraine has received under the program since it was established in 2023.

The first formal talks on restructuring more than $20 billion of Ukraine’s international bonds ended without a deal as the creditors pushed back against Kyiv’s proposal for debt relief, Bloomberg News reported. With bond payments set to resume this summer, Ukraine is asking debt holders to accept bigger losses that would allow it to finance its defense efforts against Russian aggression and prepare financial resources for economic reconstruction once the war ends.

Ukraine's central bank lowered its key rate to 14.5% from 15% in a surprise cut on Thursday, citing slowing inflation, a stable situation on the currency market and lower risks linked to international financial aid for Kyiv, Reuters reported. Most analysts and bankers had expected the central bank to keep the main interest rate steady. The rate was cut to 15% in December. "The easing of interest rate policy will support economic recovery, without threatening macrofinancial stability," the central bank said in a statement.

German Finance Minister Christian Lindner favours using the interest accrued from frozen Russian assets to support Ukraine in its war against Moscow, he said on Wednesday on the sidelines of a Group of 20 meeting which was discussing the issue, Reuters reported. Finance ministers from the G20 want to increase the pressure on Russia and strengthen Ukraine, said Lindner in Sao Paulo. "The European Union is working on how the proceeds from Russian assets can be used for Ukraine.

The International Monetary Fund on Tuesday said that it had formally launched a new trust fund to help support Ukraine's economic and financial reforms over the next five years, with a goal to raise $65 million from donor countries, Reuters reported. The Ukraine Capacity Development Fund was launched in Kyiv with initial resources of $16.5 million provided by the Netherlands, Slovakia, Latvia, Japan and Lithuania.

The World Bank's private investment arm has mobilised nearly $1 billion to rebuild Ukraine's private sector and is shifting its broader investment focus towards equity, its managing director told Reuters. Around $620 million of the funds mobilised for Ukraine - part of a $2 billion package announced in December 2022 - are from the investment arm's own balance sheet and another $360 million from external financing, said Makhtar Diop, managing director of the International Finance Corp (IFC). But the path ahead is not without its challenges.

The European Union’s executive arm recommended on Wednesday that the bloc open membership talks with Ukraine, an encouraging step for the government in Kyiv in what remains a long and arduous joining process, the New York Times reported. The recommendation comes with the caveat that Ukraine must take steps to address corruption, protect minorities and limit the power of oligarchs. “Ukraine continues to face tremendous hardship and tragedy provoked by Russia’s war of aggression,” said Ursula von der Leyen, the president of the European Commission, the body’s executive branch.

Cryptocurrency issuer Tether has frozen 32 crypto wallet addresses containing a combined $873,118 it said were linked to "terrorism and warfare" in Israel and Ukraine, the company said on Monday, Reuters reported. Israeli police said last week they had frozen crypto accounts used to solicit donations for Hamas on social media. Hamas' Oct. 7 attack on Israel killed 1,300 people. Tether's first Israel-related freeze was on March 16, 2023, while the first Ukrainian-related freeze was on June 16, 2021, a Tether spokesperson told Reuters via email. TRM Labs, a major U.S.