Ukraine

Ukraine will favor cheaper borrowing from official lenders as it seeks to shore up next year’s budget, and plans to enlist the World Bank to help raise as much as $1 billion, Bloomberg News reported. The eastern European nation is examining the possibility of using World Bank guarantees to attract financing, Deputy Finance Minister Yuriy Butsa said last week in an interview that was cleared for publication Tuesday. The government sold $3 billion of Eurobonds this month for the first time since a 2015 debt restructuring.

Already reeling from a $4.5 billion bill to save its ailing No. 1 lender, Ukraine is now bracing for an even costlier rescue, and says audits by PwC’s local office were instrumental in the bank’s failure, Bloomberg News reported. The government may have to stump up 38.5 billion hryvnia ($1.5 billion) more to recapitalize Privatbank after last year’s state takeover, according to documents seen by Bloomberg. The figure is from due diligence carried out by Ernst and Young Audit Services LLC, which estimated a “conservative” shortfall of 192 billion hryvnia before nationalization.

Ukraine's largest steelmaker, Metinvest said on Wednesday steel and coke assets in territory controlled by pro-Russian separatists had been seized by rebels, the International New York Times reported on a Reuters story. "Metinvest does not expect any such seizure to have a negative effect on the implementation of its debt restructuring," the company said in a statement. Metinvest's bond holders and banks agreed a restructuring last month. Metinvest is part of the business empire of Ukraine's richest man, Rinat Akhmetov.

Embarrassed members of Ukraine’s parliament have given up a pay rise to try to defuse public anger after an exercise in transparency revealed they held hundreds of millions of dollars of assets from expensive cars to prized works of art. Tens of thousands of civil servants were required to file public “e-declarations” of their wealth as part of a far-reaching anti-corruption initiative backed by western donors to the war-scarred country.

The Ukrainian government Thursday welcomed a long-delayed emergency payment of $1 billion from the International Monetary Fund, a move that paved the way for further international aid to help bolster the country’s fragile finances, The Wall Street Journal reported. “The positive decision of the IMF suggests that the world recognizes that there are reforms in Ukraine, there is qualitative and positive change in Ukraine, and the country is moving in the right direction,” Ukrainian President Petro Poroshenko said in a statement.

Ukraine has agreed a restructuring deal with Russia's Sberbank on $367.4 million of state-guaranteed debt, the government said in an online statement on Thursday, the Daily Mail reported on a Reuters story. The deal included a 25 percent writedown and maturity extensions to Sept. 1, 2019, it said. The debt of state-owned firms, Ukravtodor and Yuzhnoye State Design Office, was included in the external loans that Ukraine has sought to restructure under a $40 billion bailout programme coordinated by the International Monetary Fund.

The head of the International Monetary Fund warned that the lender’s bailout of Ukraine could be in jeopardy without “a substantial new effort” by the country to accelerate overhauls to improve governance and fight corruption, The Wall Street Journal reported. IMF Managing Director Christine Lagarde’s remarks on Wednesday underscore growing concerns in the West that Ukraine isn’t moving fast enough to make its recession-hit economy more competitive and root out graft.

Lenders of last resort are becoming agents of change for economies across the former Soviet Union, Bloomberg News reported today. Their governments paralyzed by collapsing revenue, central banks sprang into action when the crisis hit last year, allowing more flexible currencies to take root from Belarus to Azerbaijan.

Ukraine’s leaders pledged to put aside their differences and take measures to unlock loans from the International Monetary Fund, after weeks of squabbling strained the pro-Western coalition and delayed the latest bailout tranche, The Wall Street Journal reported. The statement, signed by the president, prime minister and chairman of parliament and released late Tuesday, tried to draw a line under infighting in the coalition.

The International Monetary Fund (IMF) will not get involved in the negotiations between Moscow and Kiev to restructure Ukraine’s debt to Russia, IMF Communications Department Director Gerry Rice said in a briefing on Thursday, Sputnik News reported. “We expect Russian and Ukrainian authorities to conduct direct discussions on this matter,” Rice stated.