Zelenskyy allows the Cabinet of Ministers to suspend payments on foreign debt until October

Zelenskyy allows the Cabinet of Ministers to suspend payments on foreign debt until October

This is stated in the card of law No. 3880-IX on the Verkhovna Rada website.

The explanatory note notes that in March 2023, the IMF approved a new $15.6 billion Extended Fund Facility (EFF) program for Ukraine, part of a broader package of support for Ukraine from international donors and partners. As part of the IMF program, a debt sustainability analysis is carried out.

According to the analysis, Ukraine’s public debt is recognized as unsustainable. Ukraine has committed to restoring the sustainability of its public debt by restructuring external commercial debt on the one hand, and official bilateral debt on the other.

According to the IMF methodology, the assessment of debt sustainability includes, in addition to public debt, in particular, the debt of the Recovery Agency, since its servicing is carried out from the state budget. The Recovery Agency’s Eurobonds are currently outstanding in the amount of $700 million with an interest rate of 6.25% per annum, with a maturity date of June 24, 2030.

The Verkhovna Rada adopted this document as a basis on July 18. As MP Yaroslav Zheleznyak explained earlier, the law gives the Cabinet of Ministers the right to suspend payments on external public debt until October 1, 2024. The government also has the right to borrow public debt from the Recovery Agency.