19:58 GMT +325 May 2019
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    A man stands next to an advertising placard showing British pounds, US dollars and Ukrainian hryvnia banknotes in the Ukrainian capital Kiev

    Ukraine Accepts Possibility of Default if Debt to Russia Not Repaid

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    Crisis in Ukraine (116)

    Ukraine will go into default if it does not make a $3-billion debt repayment to Russia by the end of the year, the country’s Minister of Finance Natalie Jaresko warned.

    MOSCOW (Sputnik) – Russia issued a $15-billion loan to Ukraine in December, 2013, having bought $3 billion-worth of Ukraine's Eurobonds. The rest of the loan was cancelled following a regime change that took place in Ukraine in February, 2014.

    Russia maintains that Ukraine must repay its debt in full by the end of 2015.

    "If we do not make the payment – yes [Ukraine will default]," Jaresko told "5 TV", a Kiev-based television channel, adding that "we are all preparing for all possibilities."

    According to Jaresko, Ukraine is currently unable to make a repayment to Russia, but is ready to discuss debt restructuring with the Russian side.

    Ukraine has been increasingly reliant on external help in order to restore its economy, which was significantly weakened by the 2014 change of power and the subsequent outbreak of hostilities in the country’s southeast.

    Ukraine’s overall state debt amounts to $70 billion, of which about $40 billion is owed to international money lenders.

    The International Monetary Fund (IMF) has agreed to allocate $17.5 billion to Ukraine as part of a four-year financial aid program.

    The fund is currently preparing a reform of its lending-into-arrears policy, which will prevent a halt of IMF aid to Ukraine in case of a default.

    Crisis in Ukraine (116)
    Ukraine, Russia
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