Without the IMF money, default in Ukraine is inevitable - media

9 February 2015 08:44  2591181 092156
Without the IMF money, default in Ukraine is inevitable - media

Without extensive credit lines from the IMF, default in Ukraine is inevitable.

This was written by Andriy Blinov in an article for the "ZN".

"If the IMF does not give (or gives not enough) funds, default, as well as new devaluation and inflation surges, looks inevitable. Ukraine does not want to (and cannot) pay $ 11 billion of foreign debts without adequate foreign assistance as the last year." - the author writes.

As for the exchange rate prognosis, in the author's opinion, the currency market will calm down only when it becomes known that the IMF offers an extensive line of credit for Ukraine. Then the planning horizon in business will grow from one to several months. Meanwhile, even the NBU focuses only on immediate currency payments.

The management have estimated that in the first quarter they will need about one billion dollars for repayment and servicing external debt, as well as $ 500 million a month for the needs of the "Naftogaz". In total, 2.5 billion dollars.

According to the sources of the DT.UA on the content of the memorandum on the results of the IMF mission, which ended this week, they are talking about the total amount of funding within 20-27 billion dollars. This is a four-year EFF (Extended Fund Facility) program.

They have agreed issues of the regulatory reform, further reduction of expenditures for the administrative staff, commitment to inflation targeting policy. The draft text of the agreement with the IMF avoids military aspects probably based on the assumption that active hostilities in the country will soon cease.

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