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IMF Says Can Support Ukraine Without Private Debt Deal

The International Monetary Fund says it could continue bailout funding for Ukraine even if Kyiv does not reach a debt-restructuring deal with private creditors.

IMF spokesman Gerry Rice said on June 11 that it remains crucial for the country to reach an agreement to reduce its huge private debt burden.

The IMF launched its $17.5 billion, four-year loan program in March based on the assumption that debt negotiations with private creditors would generate another $15 billion in savings, enabling Kyiv to boost is reserves.

Rice said that should happen before the IMF completes the first-stage review of the bailout.
The IMF "has said it is vital that Ukraine and its creditors reach an agreement."

Nevertheless, if a debt reduction deal is not done and Kyiv stops paying private creditors, the IMF can continue to make disbursements on its loan program to Ukraine.
"The IMF has a policy called lending into arrears that allows us to continue lending to a country when it has arrears to private creditors and other conditions of the policy are met," Rice said.
Based on reporting by Reuters and AFP

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