KYIV, July 7 – The National Bank of Ukraine said on Friday the country would make $750 million of foreign debt payments in the second half of the year using foreign loans, privatization revenues as well as dollars bought on the market.
NBU Chairman Volodymyr Stelmakh told a news conference Ukraine had spent $955 million to service its foreign debts in the first half of 2000 and would pay $750 million in the second half.
"The first half of the year was not easy. It was difficult to keep within our major (macroeconomic) targets and secure foreign debt servicing," said Stelmakh. "But… we hope we will manage to pay them in the second half," he said.
Serhiy Yaremenko, head of the bank currency regulation department, said the bank planned to buy $500 million on the interbank currency market by the end of the year, in addition to $746 million bought since January.
The central bank's hard currency reserves slipped to $1.035 billion on June 30 from $1.087 billion on June 9.
Ukraine had initially hoped for loans from the International Monetary Fund and World bank to service its old borrowings. But the two major lenders froze loans over slow reforms last year and Ukraine has so far failed to unlock the funds.
Stelmakh said he hoped the IMF and the World Bank would resume financing in the second half of the year, which would help debt servicing.
Senior government officials are due to fly to Washington in mid-July in a bid to persuade the IMF to resume lending under its suspended $2.6 billion program.
Stelmakh said the central bank also counted on more active privatisation with participation by foreign investors.
The State Property Fund has so far raised Hr 1.04 billion ($191 million) from cash sell-offs and has an annual target of Hr 2.5 billion.
Ukraine had initially had to spend Hr 16.3 billion to pay off interest and principal on its debts due in 2000.
But the figure has dropped considerably after a successful restructuring deal of $2.37 billion in short-term commercial debt for new seven-year Eurobonds.
This year the government also hopes to reschedule $782 million, including $500 million to the Paris Club of sovereign creditors and $282 million owed to Turkmenistan.
Ukraine stopped payments on Paris Club debts in January but can not start formal restructuring talks until it has persuaded the IMF to renew lending.
