Ms. Christine Lagarde, the Managing Director of the International
Monetary Fund (IMF), addressed the following letter about Ukraine to
members of the financial community:
“The Ukrainian authorities have embarked on an ambitious economic program
with support from the international community. This includes substantial
fiscal consolidation and energy sector reforms, the rehabilitation of the
banking system, the build-up of the National Bank of Ukraine’s (NBU)
international reserves, and the improvement of the business environment to
enhance the productive potential of the economy. Despite a very challenging
environment, these efforts have progressed in line with the IMF-supported
program and have started to bear fruit. The economy is showing signs of
recovery, the foreign exchange market has been broadly stable, confidence in
the banking system is gradually recovering, and inflation is receding.
“This economic program has received exceptional financing from
international financial institutions and bilateral partners, which has
exceeded US$10 billion so far in 2015,consistent with commitments of more than
US$25 billion for 2015–18. In addition to continued support from these
international partners, the success of the program also critically rests on
support from Ukraine’s creditors.
Following several months of constructive discussions, I am encouraged that
an agreement has been reached between the Ukrainian authorities and the
Ad-Hoc Creditor Committee on the parameters of an operation to restructure
Ukraine’s Eurobonds. These parameters substantively meet the objectives
set under the IMF-supported program to ensure that Ukraine’s debt remains
sustainable with high probability and that the program is fully financed.
Together with full implementation of the program, they will provide the
necessary external debt service relief, reduce annual post-program gross
financing needs as envisaged, and place public debt firmly on a downward path.
“High participation by all concerned Eurobond holders in the upcoming debt
exchange is paramount, since Ukraine lacks the resources under the program
to service its debts on the original terms. Together with the authorities and
the Ad-Hoc Creditor Committee, I call on all creditors to support this offer.
“While fully aware of the challenges ahead, the Ukrainian authorities’
strong start in implementing their economic program has reaffirmed their
determination to address the economic imbalances and deepen structural
reforms in order to put the economy on a path of sustained growth and financial
stability. I firmly believe that the authorities’ program warrants the
strong support of the international community
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