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    National Bank of Ukraine Chief Says No Grounds for Default

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    Concerns about a possible default in Ukraine are groundless, the head of the National Bank of Ukraine Valeria Hontareva said Saturday during a Yalta European Strategy (YES) forum session held in the Ukrainian capital.

    KIEV, September 13 (RIA Novosti) - Concerns about a possible default in Ukraine are groundless, the head of the National Bank of Ukraine Valeria Hontareva said Saturday during a Yalta European Strategy (YES) forum session held in the Ukrainian capital.

    "I have been working in finance for 23 years, and for all 23 years I've been hearing of a default. We started discussing it in 1995 and have been talking about it ever since then. We have a [CCC currency sovereign credit] rating, but there are no reasons to talk about a default. We will service our liabilities, including Naftogaz securities," the National Bank chief stressed.

    Hontareva also added that there had been a major increase in devaluation and inflation rates of hryvna, the national currency of Ukraine.

    "Right now, unfortunately, the devaluation in our country has reached over 60 percent compared to the previous year, the inflation – 90 percent," she said.

    On August 29, the International Monetary Fund approved the disbursement of about $1.39 billion to Ukraine. The organization approved its two-year $17 billion stand-by arrangement on April 30.

    Ukraine has to undergo through a severe austerity program that includes shedding 24,000 government jobs, raising taxes, selling off state assets and withdrawing subsidies on natural gas in order to receive the IMF funds in full.

    Ukraine's economy is suffering as a result of the crisis in the country, with a standoff between government forces and independence supporters in the country's southeastern regions.

    Kiev also has a significant gas debt which its gas company Naftogaz owes to Russian gas giant Gazprom and which is estimated to stand at over $5.3 billion.

    Tags:
    default, economy, International Monetary Fund
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