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    Ukrainian President Petro Poroshenko and International Monetary Fund (IMF) Managing Director Christine Lagarde shake hands during their meeting in Kiev, Ukraine, in this September 6, 2015

    IMF Reform Allowing More Loans to Kiev 'Risky Proposition' - Russian Envoy

    © REUTERS / Ukrainian Presidential Press Service/Handout via Reuters
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    Crisis in Ukraine (116)

    International Monetary Fund (IMF) reforms that will allow Ukraine to continue borrowing while simultaneously not paying back a loan to a sovereign creditor is a "risky proposition," the Russian envoy to the European Union said.

    MOSCOW (Sputnik) — The United States, as well as other Western states are currently preparing to reform the current IMF lending-into-arrears policy, which would prevent a stoppage of IMF aid to Ukraine if the country defaults on its loan from Russian.

    "This is a risky proposition. It is necessary to change, bend these rules for the sake of Ukraine, as beyond Ukraine a long, long line of countries from different continents requiring the same things will line up," Vladimir Chizhov told Rossiya-24 TV channel.

    According to the IMF arrears policy, countries borrowing from the fund continue to receive loans even if they miss payments to commercial creditors. But if a payment to a sovereign creditor (such as Russia) is missed, the borrower cannot receive additional IMF aid.

    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 canceled 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.

    Crisis in Ukraine (116)


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