Ukraine

Ukraine is expected to start selling electricity to Slovakia and Hungary this month, a move that could boost revenues for power generators in the country, sources told Reuters. The expansion of power trade with Europe, which is currently curtailed to limited amounts sold to Poland and Moldova, could increase cashflow to Ukrainian utilities hit by a drop in domestic electricity since the Russian invasion, while providing more energy to the 27-country European Union as it grapples with reduced gas supplies from Russia.

Ukraine's central bank said the situation in the war with Russia will determine whether its key interest rate can be cut from the current level of 25% or whether further hikes will be necessary, Reuters reported. On June 2, the central bank sharply raised its main interest rate to 25% from 10%, tightening monetary policy for the first time since the Feb. 24 Russian invasion to tackle double-digit inflation and protect incomes and savings during the war.

Ukraine's central bank on Friday said in a statement that it had recognised Kharkiv's Megabank as insolvent, citing lending practices at the bank ahead of the war, Reuters reported. The bank, which reported shareholder capital of 823.7 mln hryvnias ($28.16 million) last June, is 11.3% owned by the European Bank for Reconstruction and Development and 11.3% by Germany's KfW. https://www.businessfast.co.uk/ukraine-central-bank-declares-kharkivs-mega-bank-insolvent/Ukraine Central Bank Declares Kharkiv's Mega Bank Insolvent

World Bank President David Malpass on Wednesday suggested that Russia's war in Ukraine and its impact on food and energy prices, as well as the availability of fertilizer, could trigger a global recession, Reuters reported. Malpass told an event hosted by the U.S. Chamber of Commerce that Germany's economy, the world's fourth largest, has already slowed substantially due to higher energy prices, and said reduced production of fertilizer could worsen conditions elsewhere. "As we look at the global GDP ... it's hard right now to see how we avoid a recession," Malpass said.

Strict limits on public borrowing and spending will be suspended for another year, the European Union said on Monday, in order to help member nations deal with the economic fallout of the war in Ukraine, the New York Times reported. The stringent fiscal rules were temporarily relaxed in March 2020 in response to the coronavirus pandemic, allowing for generous state aid to struggling businesses and citizens. They were due to be reinstated at the start of next year.

Lithuania, Slovakia, Latvia and Estonia will call on Tuesday for the confiscation of Russian assets frozen by the European Union to fund the rebuilding of Ukraine after Russia's invasion, a joint letter by the four showed on Monday, Reuters reported. On May 3, Ukraine estimated the amount of money needed to rebuild the country from the destruction wrought by Russia at around $600 billion. But with the war still in full swing, the sum is likely to have risen sharply, the letter said.

Seizing Russian state assets to help finance the rebuilding of war-torn Ukraine remains a possibility, German Finance Minister Christian Lindner said on Friday, but he added that no decision on the matter was taken at a meeting with his G7 counterparts, Reuters reported. "We talked about the continuation of sanctions in connection with Ukraine and discussed the issue of the confiscation of Russian assets," Lindner said, wrapping up day two of the talks.

Russia rushed forward two payments on its international debt on Friday in its latest attempt to stave off a default that has looked on cards since its invasion of Ukraine, Reuters reported. A week before the interest payments are due and just five days before a key U.S. waiver allowing such transfers expires, Russia's finance ministry said it had wired $71.25 million for a dollar-denominated bond and 26.5 million euros ($28 million) for euro-denominated notes.

Ukrainian President Volodymyr Zelenskiy said on Monday he had discussed the need for financial support for Ukraine's economy during a video conference with International Monetary Fund Managing Director Kristalina Georgieva, Reuters reported. "The IMF is our important partner. We look forward to further fruitful joint work in maintaining financial stability of Ukraine," Zelenskiy wrote on Twitter. Zelenskiy's office said in a statement after the video conference that he had asked for financial support to be sped up for the country, which is trying to fend off Russia's Feb. 24 invasion.

The World Bank said in a brief released on Wednesday that remittances to Ukraine are anticipated to increase more than 20 percent in 2022 against the backdrop of Russia’s invasion of its neighboring country, The Hill reported. “Just as the [low- and middle-income countries] were starting to recover from the COVID-19 pandemic, the war on Ukraine erupted, altering the global landscape for migration and remittances. Remittances to Ukraine are expected to rise by over 20 percent in 2022,” the World Bank said in its Migration and Development Brief.