Analyst: IMF will not be able to change the rules on a loan to Kiev in hindsight

Analyst: IMF will not be able to change the rules on a loan to Kiev in hindsight


The efforts of the IMF to prevent a default of Ukraine’s debt to Russia can only be welcomed, says the CEO of the Smith’s Research & Gradings Terence Smith. But, he said, access to money, the IMF Kyiv can obtain only after repayment of all payments.

WASHINGTON, 13 Oct. Change of rule on previously issued loan for Ukraine the international Monetary Fund (IMF) fails, the credit line was opened on the current conditions of the Fund, they also featured the requirement to restructure the debt, including the debt to Russia, said the CEO of the Smith’s Research & Gradings Terence Smith.

“The IMF cannot retroactively modify or simplify the conditions for the grant funds, which take into account the contract, which Ukraine concluded with Russia… you can’t change the past. Repayment of debt to Russia entirely should be part of any plans regarding the future of the IMF (in part a continuation of the current assistance programme of Ukraine — ed),” he said.

According to Smith, the efforts of the IMF to prevent a default of Ukraine’s debt to Russia is welcome. But the success of this process and the access to the money the IMF can be only after payment of all required payments and satisfy all their creditors, including Russia.

Earlier, the Minister of Finance of the Russian Federation Anton Siluanov reported that the IMF, in conversation with him, said that a change of the procedure for granting assistance. According to the Minister, are preparing common approaches to ensure that you do not include all of the obligations of sovereign countries to official creditors in the volume of financing support from the IMF.

Siluanov expressed concerns that this is done solely in the current situation to freeze payments of Ukraine to Russia. He also reminded that in the event of Ukraine defaulting on the debt, Russia could exercise its right to call in the IMF about the insolvency of this program.

The head of the Ministry of economic development Alexei Ulyukayev has previously admitted the possibility that Ukraine will not repay in December the debt to Russia in $ 3 billion. Ukraine in September launched a legal process of restructuring part of its debt. The government of Ukraine included in the perimeter of restructuring and Treasury of the Russian Federation Eurobonds for $ 3 billion. In Kyiv they are considered commercial and not state credit. Russia has repeatedly voiced the position that to participate in this restructuring has no plans and will demand full repayment by Ukraine of Eurobonds.