Ukraine Won’t Pay $665 Million Debt on June 2: Finance Ministry
In a recent announcement, Ukraine’s Finance Ministry revealed that it will not be making a payment of $665 million to international creditors on June 2. This decision is part of a larger issue regarding $2.6 billion in GDP-linked securities, which are tied to the country’s economic growth. The payment will not be made until the debt is restructured.
The news comes as Ukraine is struggling to recover from the economic impact of the ongoing conflict with Russia. The country has been facing significant challenges in terms of financing its budget and repaying its debt. The decision to delay the payment is likely an attempt by the Ukrainian government to buy some time and restructure its debt to make it more manageable.
The $2.6 billion in GDP-linked securities were issued back in 2010, and the payments were tied to Ukraine’s economic growth. However, the country’s economy has been facing significant challenges in recent years, and the payments have become increasingly difficult to make. The Finance Ministry’s decision to delay the payment is likely a result of this challenge.
The news has been met with a mixed reaction from international investors. Some have expressed concerns about the potential impact on Ukraine’s credit rating, while others have welcomed the decision as a necessary step to help the country recover from its economic woes.
The Finance Ministry’s announcement follows a 2024 deal with international creditors that removed the “cross-default clause” from Ukraine’s debt agreements. This clause allowed creditors to demand immediate repayment of the entire debt if Ukraine failed to make a single payment. The removal of this clause has given Ukraine more flexibility in terms of restructuring its debt and making payments.
The decision to delay the payment is likely to have significant implications for Ukraine’s economy. The country is heavily reliant on foreign financing, and the delay in payment could have a negative impact on its credit rating. However, the Finance Ministry’s decision is also seen as a necessary step to help the country recover from its economic challenges.
In conclusion, Ukraine’s decision to delay the payment of $665 million to international creditors is a complex issue that is likely to have significant implications for the country’s economy. The Finance Ministry’s decision to restructure the debt and delay the payment is likely a necessary step to help Ukraine recover from its economic woes. However, the impact on the country’s credit rating and the overall economy remains to be seen.
Source: https://www.rt.com/russia/618384-ukraine-default-payment-gdp-securities/amp/
