Page 12 - bne IntelliNews Country Report: Ukraine Dec17

from the $17.5bn bailout agreed with the IMF in 2015. The greenlighting of pension reform and creation of a specialised anti-corruption court are among other steps that are necessary for further IMF funding.
The NBU expects that next tranche will be received in the first quarter of the next year. Along with a surplus of the overall balance of payments, this is expected to drive international reserves up to $22.2bn or 4.2 months of future imports by the end of 2018.
Ukraine's foreign exchange reserves increased by $602mn, or 3.3% month-on-month to $18.637bn in September. The result was attributed to the fact that Kyiv obtained on September 26 $1.32bn from the placement of $3bn in Eurobonds maturing in 2032. The rest of the total proceeds from the Eurobond placement, or $1.68bn, were directed to purchase the bonds maturing in 2019 and 2020.
On September 18, Ukraine placed $3bn in 15-year Eurobonds at 7.375% per annum, after Kyiv mandated JP Morgan, BNP Paribas and Goldman Sachs as bookrunners for its new Eurobonds issue. The deal has become a first market placement for the country since the victory of the popular uprising in February 2014.
Meanwhile, Alexander Paraschiy at Kyiv-based brokerage Concorde Capital has doubts on the IMF tranches (possibly two assumed by the NBU) of $3.5bn next year.
"The To Do list to receive the first tranche is quite challenging as it includes hiking natural gas prices even further and establishing an independent anti-corruption court," he wrote in a note on November 6. "The next tranche may also require launching a farmland market, which we view as nearly impossible in an election campaign year. The authorities won't be rushing to comply with these requirements so we expect IMF funds will be no more than $2bn in 2018."
Instead, Paraschiy believes that it is possible that Ukraine will receive a €600mn loan tranche of macro financial assistance from the EU in 2018, which was somehow overlooked by the NBU's report.
Concorde expects gross reserves will slide to $18bn in 2017, while they will improve to $21bn in 2018 with the rising role of private investments.
2.6 Almost all of the EBRD countries booming
Higher exports and rising levels of investment on the back of improving commodity prices have prompted the European Bank for Reconstruction and Development (EBRD) to significantly increase its forecasts for economic growth in Emerging Europe. The bank made its case for the revised forecasting in its latest Regional Economic Prospects report released on November 6 .
Countries across the entire EBRD region, with two exceptions, are enjoying broad-based growth and rising income levels. Several countries where the development bank is active are also experiencing record low unemployment. The negatives in the picture are minimal and are mainly caused by economies
12 UKRAINE Country Report December 2017 www.intellinews.com