IMF decided to proceed with the 17,5 billion dollar loan to Ukraine despite fears for a potential default on behalf of Kiev on a 3 billion dollars debt to Russia in December.
According to IMF lending policy, the fund is fobindden from lending money to close-to-defalt countries. Russian President Putin and his Ukrainain counterpart Viktor Yanukovich agreed that Russia would buy Ukrainvni Eurobonds, worth $15 dollars. Russia bought only part of the agreed amount of bonds, worth $3 billions. The rest 12billions were not bought due to the Ukrainian crisis that lead Yanukovich to step down.
The IMF appears to have wanted to amend its lending rules for a while. Anders Aslund, a senior fellow at the Atlantic Council, said the IMF initially wanted to ensure that China wouldn’t be able to thwart IMF lending to member countries seeking bailouts as Beijing boosted loans in Africa and other countries.
The Ukrainian debt has become the catalyst.
Kiev has insisted that Moscow take a haircut on the loan like other creditors. The Kremlin has refused.
Last week, Ukrainian Prime Minister Arseny Yatsenyuk described the $3 billion loan as a Russian bribe to Yanukovich to stop the Association Agreement with the EU.
Russia’s longstanding position is that Ukraine’s debt should be classified as official intergovernmental.
“Ukraine’s debt to Russia which is due to be redeemed in December of this year cannot be treated as a debt before private creditors, the debt has another status, it is official,” said Russian Finance Minister Anton Siluanov repeating the Kremlin’s position on Wednesday.