The International Monetary Fund said on Thursday that Ukraine should continue with “good faith” efforts to reach an agreement with investors holding its GDP warrants after it defaulted on a payment on the growth-linked fixed income instruments in May.
“We encourage the Ukrainian authorities and their creditors to continue to make progress toward reaching an agreement in line with the debt sustainability targets under the IMF program,” said Julie Kozack, Director of the IMF’s Communications Department during a media briefing.
Ukraine’s finance ministry said on May 30 that it would not be paying more than half a billion dollars due on the warrants, marking the first payment default since it created the instruments as part of its 2015 debt restructuring.
Asked whether this would have any implications for completion of the review, Kozack said that as in all cases where a member country may have arrears to private creditors, staff would assess whether the requirements under the Fund’s lending into arrears policy are met.
Kozack added that the IMF’s Executive Board was expected to meet in the weeks to come to sign off on the preliminary agreement with Fund staff on the eighth review of the programme, which would trigger a payment of around $500 million.