An illustrative image / Photo from UNIAN
A decision that the Ukrainian Cabinet of Ministers may take regarding a moratorium on commercial debt repayment will be pegged to the deadline of the end of September when Ukraine is to make principal debt repayment on a $500 million bond, according to Deputy Finance Minister for European integration issues Artem Shevalev.
The next key bond payment of $500 million is due in September, Shevalev said.
"Payment on coupons is one thing. This is about financial discipline. When it goes about principal debt repayment, it would be difficult to talk with other creditors if we pay someone in September and won't pay others later," he explained.
At the same time, Shevalev assured that the negotiation process with the country's creditors had reached a more active stage, and there is a constant direct and indirect communication taking place between the two sides.
"I cannot disclose the details, but at least the dialogue has reached different dynamics," he said.
As reported earlier, Ukraine has been conducting negotiations with the creditors on restructuring its public debt, regarding extension of maturities and writing-off part of the debt's nominal value, as part of the program with the International Monetary Fund (IMF). The measures aim at saving $5.2 billion in debt repayment in 2015 and up to $15.3 billion in the next four years.
In June, Ukrainian Finance Minister Natalie Jaresko stated that if there were no progress in talks with the creditors, Ukraine would "theoretically" be in a position to declare a moratorium on public debt repayment in late July, with such right being provided by a law, which had come in force on June 17.
Later, Ukrainian officials and the ad hoc creditors' committee issued a joint statement reporting significant progress made in the negotiations and reaching confidentiality arrangements.
On July 24, the Ukrainian Finance Ministry effected $120 million interest payment that came due on that day.
This week the Finance Minister reported that the ministry had submitted an updated proposal to the creditors and was expecting the next round of talks in the coming days.
In her recent statement, IMF Managing Director Christine Lagarde called Ukraine's introduction of the debt moratorium as undesirable but assured that this move would not stop the IMF's cooperation with Ukraine, and the IMF was ready to allocate the second tranche to Ukraine worth $1.7 billion.