FX.co ★ IMF recognizes Ukraine’s debt to Russia as official

Several weeks ago, Russia’s mass media reported that the executive board of the International Monetary Fund recognized Ukraine’s $3 billion debt to Russia as official and sovereign. However, it turned out that the new Ukrainian authorities will not repay the debt owed to Russia on time.
It is noteworthy that several days before the due date, the IMF agreed that $3 billion received by the former Ukraine’s president Viktor Yanukovych and Prime Minister Mykola Azarov is an official and not commercial loan. The decision was taken without any discussions and came into effect automatically on Wednesday. However, the status of the debt does not guarantee that Ukraine will pay it back.
Arseniy Yatsenyuk, the Ukrainian prime minister, said that his country will not repay a $3billion debt owed to Russia despite a real threat of default. Ukraine could lose the international financial support because of its liberal attitude to credit obligations. As a result, the IMF had to adjust its lending policy. The new rules allow the defaulting countries to get financial support. Thus, Ukraine will continue getting assistance, even after it failed to make an installment on time.
The Russian president has already ordered the Cabinet to prepare for court actions against Ukraine over $3 billion debt. The claims must be submitted to London’s court. This case will be the most significant one in the financial sphere in the upcoming year.