The gold and foreign currency reserves will start melting without tranches of the International Monetary Fund; there will start the same spiral, which was in January-February 2015, when the currency rate could not be stopped, CEO of Dragon Capital Tomas Fiala said during the interview to EP.
“No one wants to carry out reforms, but we need to do them. Thus, if we take a look at the external debt repayment schedule, then due to the restructuring of the private state debt 2016 was the easiest one. Within each next year, the expenses for debt repayment will increase. The election year – 2019 – is the peak year in this regard”, CEO of Dragon Capital notes.
According to Fiala, within these three years (2017-2019), the National Bank, the Ministry of Finance, state banks and Ukrzaliznytsia should repay USD 14 bln of external debts, taking into account interests.
“Currently, we have USD 15.5 bln in the gold and foreign currency reserves. Out of these USD 15.5 bln, the net reserve is USD 4 billion, the other is IMF money”, Fiala reminded.
In addition, according to him, last year, the state debt increased up to USD 72 bln due to PrivatBank nationalization.
“Thus, the external debt is nearly USD 46 bln, the internal currency debt is other USD 4 bln. Other USD 22 bln in the equivalent of the hryvnia debt is mainly government bonds, including those UAH 107 bln, which were issued for the capital increase of PrivatBank”, he explained.
Fiala emphasized that Ukraine cannot repay the state debt without IMF tranches.
“We will not be able. We will not be able even to reach the presidential elections. The reserves will start melting without tranches. The market and the population will “heat” this trend, and there will start the spiral, which we had in January-February 2015, when the currency rate could not be stopped. That is why the President and the government, if they want to be re-elected, should work with IMF and increase the cushion of reserves before 2019”, he summarized.
It should be reminded that Ukraine expects to obtain the 4th loan tranche, amounting to USD 1 billion, in February. As the result, Ukraine will obtain USD 8.6 bln out of the total amount of the 4-year loan for USD 17.5 bln.
Previously, Minister of Finance Alexander Danyliuk stated that the he expects for the next IMF tranche in early February.
In September 2016, IMF approved the allocation of the third tranche, amounting to USD 1 billion, to Ukraine.
As reported, we need to conduct a pension reform, reduce the number of state employees, cancel “simplified tax system” and open the land market for continuation of cooperation with the International Monetary Fund of Ukraine.
