It is expedient for Ukraine to return to the foreign loan market in February-April 2010, as in early 2010 the country could agree on more favorable terms for fund raising, according to Deputy Finance Minister Andriy Kravets.
“We should enter the market early – in February-April,” he told the
press on Wednesday at a meeting of the INTOSAI’s working group devoted
to the state debt issues.
Kravets also said that the Finance Ministry has proposals from
various well-known international banks, which are interested in work
with Ukraine’s public instruments.
He said that it is important to adopt the national budget for 2010
on time, as without the approval of the said law by the parliament, the
Finance Ministry would not be able to borrow.
Kravets said that the latest time Ukraine made state borrowings on the foreign market was in 2007.
He also said that the period of low interest rates remained in the
past, although he said that the successful restructuring of the debt of
National JSC Naftogaz Ukrainy would improve opportunities of the
country in fund raising.
As reported, the total direct and guaranteed state debt of Ukraine
in August 2009 grew by 5.6%, or $1.85 billion, to $35.112 billion.
Since the beginning of 2009 the state debt in the foreign currency
equivalent has increased by 42.7%, or by $10.51 billion. The increase
in debt in the period was mainly a result of the loan from the IMF (SDR
4.4 billion), the issuance of state bonds and provision of state
guarantees.
Kravets said that Ukraine’s foreign loans are still far from the
critical level set by the Budget Code at 60% of GDP. He also said that
this year 49% of all borrowings to the general fund of the national
budget was made up via the placement of state domestic loan bonds, 47%
– via IMF (the International Monetary Fund) credits and 4% via credits
of the World Bank.
“The indicator of the expected ratio of the state debt to GDP by
late 2009 would be over 25%… Ukraine’s state debt in the acceptable
scope, in line with Ukrainian law,” he said.
He said that Ukraine fulfills its dent liabilities in full and on time.
He said that on October 14 the IMF mission is to arrive and the
final decision on the allocation of over $3 billion to Ukraine would be
made at a meeting of the IMF board in early November.
He said that in 2010 the country’s dependability on IMF’s credit would fall.
“I don’t see any grounds to say that if we don’t receive money from the IMF [in 2010], we’ll face a collapse,” he said.
The head of the Accounting Chamber, Valentyn Symonenko at the
meeting of the working group said that growth in the provisional debt
of the country brings potential risks, as it could transform into state
commitments in the crisis conditions. He said that it is important to
increase the quality of management of the provisional state debt.
Kravets said that this year the government gave state guarantees for UAH 14.4 billion.
