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IMF board recognizes official status of Russia’s loan to Ukraine

December 17, 2015, 4:13 UTC+3
The decision came into effect automatically on Wednesday evening after the working day ended in Washington, the seat of the IMF headquarters, as no objections had been voiced by that time
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© EPA/JIM LO SCALZO

WASHINGTON, December 17. /TASS/. The IMF board has recognized the official status of Russia’s $3 bln. loan to Ukraine extended in December 2013.

The decision came into effect automatically on Wednesday evening after the working day ended in Washington, the seat of the IMF headquarters, as no objections had been voiced by that time.

The issue was referred to the IMF board at Russia’s request. It was considered under a simplified procedure due to its absolute clarity. No one raised any objections against recognizing this loan as sovereign or suggested an official discussion be organized.

In December 2013, Russian President Vladimir Putin and the then Ukrainian President Viktor Yanukovych reached an agreement that Moscow would extend a $15 billion loan to Kiev through placing Ukrainian securities. Under the deal, $3 bln worth of bonds were listed on the Irish Stock Exchange on December 20, 2013 and bought by Russia from its National Welfare Fund.

Later on, Ukraine tried to challenge the loan’s status and reduce it to that of commercial credits subject to restructuring. Russia objected to this approach. However its suggestion that this loan be restructured under reliable Western guarantees was ignored.

In November 2015, Putin said Russia was ready to restructure Ukraine’s debt in case the United States, the European Union or any big international financial institute gave its guarantees to Russia. No guarantees have been issued.

Now, Moscow warns that in case Kiev fails to repay its debt in due time, i.e. by the end of the outgoing year, it will go to law.

Meanwhile, the International Monetary Fund on December 8 lifted the ban on crediting countries with overdue sovereign debts. Russia voted against this decision, saying it is politicized. As a matter of fact, this step means that the IMF can continue the implementation of its anti-crisis program for Ukraine even in the event Kiev falls into arrears with repayment of its debts to Russia.

The deadline for repayment of the Ukrainian debt is December 20. In the event it fails to do that, Russia will go to law ten days after that date.

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