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Eastern Europe
May 31, 2019 www.intellinews.com I Page 16
Ukraine politicians sceptical over oligarch Kolomosiky's default idea
A member of Ukrainian president Volodymyr Zelenskiy’s economic team slapped down the suggestion last week by oligarch Ihor Kolomoisky that Ukraine should default on its obligations to the International Monetary Fund (IMF).
Accelerating inbound investments with the
aim of boosting Ukraine's economic growth
will become impossible if state defaults on its debt, said Oleg Ustenko, an advisor to Zelenskiy on macroeconomic policy.
"This is definitely not the time to refuse coopera- tion with the IMF. This will cut us off from foreign markets for borrowing capital. This is extremely dangerous, considering that investment is the main bet now on the opportunity to get impetus
for further economic growth. And this is quite clearly articulated by president Zelenskiy," Ustenko told news agency Interfax on May 27.
The statement followed May 26 statement made by Zelenskiy close associate, Kolomoisky, who urged the president to reject IMF’s austerity programme and to default on its external debt.
"In my opinion, we should treat our creditors the way Greece does," Kolomoisky told the Financial Times. "That’s an example for Ukraine." In its stand-off with creditors in 2015, Athens became the first developed country to fail to repay an IMF loan, albeit temporarily.
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Russia plans another Eurobond this year, to pause buy back
Russia could sell another Eurobond this year denominated in euros or US dollars, the head of the Finance Ministry's debt department Konstantin Vyshkovsky told in an interview to Bloomberg on May 28.
In March the ministry tested the investor sentiment amid sanction risks and swiftly placed $3bn and €0.75bn worth of Eurobonds. This was the biggest Russian sovereign US dollar issue in six years. Total demand for both issues was high at $12bn.
The potential new issues would be smaller than the $3.9bn sold in March, Vyshkovsky said.
The ministry could also cancel the plans to buy back Eurobonds this year because debt holder demands are too high. This year's budget allows the ministry to buy back up to $4bn of Eurobonds.
The ministry has budgeted $3bn of net exter-
nal borrowings for 2019 overall and has already beaten the plan. But "the total borrowing pro- gramme is still there, its large. We can still place [Eurobonds] to diversify the [financing] sources and given good market conditions," Vishkovsky said previously in March.
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