Ukraine in ‘Very Active’ Talks With IMF Over Longer Aid Program
(Bloomberg) -- Ukraine is “in very active discussions” with the International Monetary Fund over a new loan program as the country gears up for a snap general election, according to Finance Minister Oksana Markarova.
Voters picked TV comedian Volodymyr Zelenskiy as president in April and will choose a new parliament next month, part of a backlash against old-guard politicians who’ve failed to end a five-year conflict with Russian-backed forces or clamp down on corruption.
The IMF agreed on a $3.9 billion loan in late 2018 to get Ukraine through this year, though aid is on hold until a new government is in place. When that happens, a new program is likely. Markarova sees it lasting three years. She didn’t specify the size.
“This program that we have right now, we’ve designed it as the breach program to cover Ukraine through two elections,” Markarova said Saturday in an interview in Skopje, North Macedonia. “In a sense, this program has done what it had to do.”
IMF aid, which has been accompanied by World Bank loans and bilateral assistance from the U.S. and the European Union, was often delayed as past governments failed to implement required reforms, especially on corruption. Zelenskiy has said he wants to install a pro-reform cabinet, assuming his poll--leading party triumphs in the July 21 election.
With investors keen on Ukraine’s domestic bonds, the government doesn’t need to sell more debt on international markets in 2019, Markarova said. It sold 1 billion euros ($1.1 billion) of debt this month.
“We already see that we’re outperforming budget projections in funding from local borrowing,” she said. Nevertheless, if market conditions are favorable, “as we did before, we’d do liability-management operations.”
Commenting on the legal battle over No. 1 lender Privatbank, which was nationalized in 2016, Markarova said the government will continue to “defend its position” against former owner Igor Kolomoisky.
“We obviously have a lot of court cases, in Ukraine and outside -- you can’t always win all of them,” she said. “We’ve done everything in this bank to build normal corporate governance. We’ve done everything to restore normal banking practices and the bank is developing.”
(Updates with quotes on Privatbank in last two paragraphs.)
--With assistance from Daryna Krasnolutska and Volodymyr Verbyany.
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