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Russia Says Ukraine Debt Repayment Law Amounts To Default

Russia has demanded that Ukraine repays all debts on time and accused Kyiv of effectively setting the stage for default with a new law.

It threatened to take the issue to international courts if necessary.

The law, approved by Ukraine's parliament on May 19, gives the government the right to miss payments to its international creditors as it negotiates the terms for restructuring $23 billion worth of foreign debt.

Russia holds a $3 billion Ukrainian Eurobond whose full repayment is due by the end of the year.

President Vladimir Putin on May 20 told a meeting with government ministers he found the new law "strange."

"To effectively announce an impending default shows a poor level of professional responsibility, all things considered," said Putin, noting that the International Monetary Fund does not lend to countries in default.

Ukraine hopes to secure the next tranche of a $17.5 billion bailout program with the IMF this summer to shore up its foreign currency reserves.

Based on reporting by Reuters and Interfax

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