Ukraine

Ukraine’s state-run energy company NJSC Naftogaz Ukrainy said it is still trying to negotiate a deal with holders of around $1.4 billion of its bonds after the government forced it to miss a deadline on Tuesday, Bloomberg News reported. The company will “urgently” present a new plan for bondholders, it said in an emailed statement. Naftogaz on Tuesday said it’s on track to default as a grace period to redeem $335 million of bonds due last week expired.

Russia and Ukraine signed separate agreements Friday to reopen blockaded Ukrainian ports and allow grain exports to begin to flow, Axios reported. Ukraine is one of the world's top exporters of wheat, sunflower oil and other agricultural products. With those exports almost entirely blocked due to Russia's Black Sea blockade, the food crisis plaguing countries in Africa and elsewhere has deepened. The deal, which was brokered by the UN with the help of Turkey, would be in place for 120 days and can be renewed, UN officials said.

U.S. Treasury Secretary Janet Yellen and Japanese Finance Minister Shunichi Suzuki agreed on Tuesday to work together to tackle rising prices of food and energy, as well as volatility in currency markets, exacerbated by Russia's war in Ukraine, Reuters reported. They said that the war had raised exchange rate volatility, which could pose adverse implications for economic and financial stability, and pledged to cooperate "as appropriate" on currency issues.

An international conference to support Ukraine after the devastating Russian invasion has outlined a series of principles to steer Kyiv's recovery and condemned Moscow's actions, Reuters reported. Representatives from more than 40 countries and international organisations like the European Investment Bank and the Organisation for Economic Cooperation and Development (OECD) signed up to the Lugano Declaration at the two-day conference in Switzerland.

Leading economic powers conferred by video link with Ukrainian President Volodymyr Zelenskyy on Monday as they underscored their commitment to Ukraine for “as long as it takes” with plans to pursue a price cap on Russian oil, raise tariffs on Russian goods and impose other new sanctions, the Associated Press reported. In addition, the U.S. was preparing to announce the purchase of an advanced surface-to-air missile system for Kyiv to help Ukraine fight back against Vladimir Putin’s aggression.

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.