MOSCOW, April 14 (RIA Novosti) - Ukraine has always been punctual about debt repayment, Stepan Kubiv the head of Ukraine's National Bank told reporters on the sidelines of the International Monetary Fund (IMF) and World Bank (WB) spring sessions in Washington.
"Ukraine has always paid its creditors on time, based on market and contract prices," he said adding Ukraine would have enough resources at hand to cover all its debts.
Concerning the country's debt, Kubiv also mentioned that Kiev would cover all its outstanding accounts.
"All the debts that we have will be paid out, there is no other option," he stated. Kubiv noted that the financial reserves of the country "should suffice" to meet all the debt obligations, without disclosing their actual volume and adding that Ukraine is ready to pay $386 for 1,000 cubic meters of Russian gas.
"Economic reform and investment, compounded by a two-year IMF program (and other bilateral contributions) imply that we will have sufficient resources to carry out market reforms," the head of the National Bank said explaining that after the loan-assisted reforms are concluded, Ukraine plans to become self-financed.
The developments around Russian gas supplies to Ukraine point to a different trend in the country's pattern of debt repayment. As of April 8, Ukraine's debt for gas to Gazprom is $2.2 billion. By the end of the year it may increase by $5-6 billion, Alexey Miller head of Gazprom told the press Saturday.
In December the gas price for Ukraine stood at $268.5. On April 1 Russia's Gazprom increased gas prices for Ukraine to $385.5 per 1,000 cubic meters as Kiev failed to cover the accumulated arrears and pay for the current supplies. Starting April 3 Moscow withdrew a further $100 discount, which the crisis-laden Ukraine had received on the condition Russia's Black Sea Fleet would stay in the Crimean port of Sevastopol. This means Ukraine will have to pay $485.50 per 1,000 cubic meters of gas. The country's authorities have previously stated that $268 is the acceptable price.
On February 22 Ukraine saw a change of power resembling a coup. The Verkhovna Rada backed by far-right movements ousted the acting President Viktor Yanukovych, amended the constitution and scheduled an early presidential election for May 25. The interim government claimed the Treasury has run dry; the economy is in serious crisis and launched talks with the IMF and other donors for financial help.
In late March the IMF announced a preliminary stabilization agreement for Ukraine amounting to $14-18 billion in loans, with the first tranche of $3 billion possibly granted in the coming months. In exchange for financial assistance Kiev should provide increased flexibility of the hryvnia, opt for a gradual increase in utility prices, carry out a pension reform and cut government spending.
