IMF: the revision of the principles of Fund for the borrowers default linked to reform

IMF: the revision of the principles of Fund for the borrowers default linked to reform


Politics of IMF lending would be modified to allow to continue financing of Ukraine in case of Russian default on the loan, this is part of the program of reforming of the Fund, said the IMF representative.

WASHINGTON, 29 Jan. Changing the rules of the International monetary Fund to continue funding the borrower if it defaults on certain sovereign debt is part of a program of reform of the Fund from 2014, it does not concern any specific country, said the IMF representative Jerry rice.

The USA together with other Western countries are preparing next month to change the policy of IMF lending to allow the Fund to continue financing of Ukraine in case of Russian default on the loan, reported the newspaper The Wall Stret Journal.

“It (the decision on approval of funding for the program when a sovereign debt default — ed.) part of the program of reforming of the Fund, which consists of various parts and contains the note following the meeting of the Board of Directors of the IMF from 2014 year,” rice explained to reporters.

He also added that the IMF will support Ukraine in the efforts to alleviate its debt burden and welcomes any negotiations with creditors and reaching an agreement. The question of whether to apply new rules to previously signed contracts, he left unanswered. And on the question of when a decision on this issue can be taken, he also did not answer. “I don’t have specific dates for you. It will happen just not next week (at the regular meeting of the Board of Directors of the IMF — ed.)”, — he added.

Currently, the IMF’s policy prohibits the Fund to provide loans to countries that have experience of overdue payments to other governments. Ukraine has the risk to prevent a default on its bonds for 3 billion dollars, purchased by Russia maturing in December.

The four-year program of financial assistance to Ukraine was approved by the IMF Board on March 11. The programme envisages allocating the Fund’s $ 17.5 billion dollars, and all international creditors over four years — $ 40 billion. Ukraine this year has already received 6.7 billion dollars in aid. This year allocated a further two tranches of 1.7 billion dollars.