LDN - Business

Ukraine expects IMF tranche, market return in autumn

[July 05, 2017] By Marc Jones

LONDON (Reuters) - Ukraine expects long-awaited state pension reforms to be passed after its parliament's summer break, its finance minister said on Wednesday, meaning its next tranche of IMF aid and a return to borrowing markets will not happen before August.

Oleksandr Danylyuk told Reuters that the complexity of the pension reform plan, which is key to unlocking its next round of IMF financing, was the main reason why it would not be completed in the next couple of weeks, as it had hoped.

"It doesn't look like it is going to happen so they (parliament lawmakers) will have to finish the work in early fall (autumn)," Danylyuk said in an interview.

"We need to invest more time in communication ... both in the public domain but also within the parliament. Yes, the parliament is pretty much ready to vote for it but everybody needs to comfortable."

That would have the knock-on effect of delaying its IMF program. "Whenever we complete it we will get the (IMF) tranche," he said.

It will also affect the timing of its first return to debt markets since its 2015 bailout. Back in May, Danylyuk said it was eyeing a $1 billion bond sale but it appears like the ambitions have been scaled back somewhat.

"I think $500 million will go," Danylyuk said, adding it was "logical" to wait until pension reforms were finalised.

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Ukrainian Finance Minister Oleksandr Danylyuk speaks during an interview with Reuters in Nicosia, Cyprus May 11,2017. REUTERS/Yiannis Kourtoglou

"For us it is important to be ready and we are ready. We are in a position to issue tomorrow, as by the way we could have done it back in April, the question is do we need it and if we expedite the process, what would we get from that."

Danylyuk said the nomination of a new central bank governor, another issue markets are following closely, was "pretty much imminent".

On the recent cost of cyber attacks that have hit the Ukraine's tax department, power firms and ministries, including the finance ministry, he played down estimates that it could be as much as 0.5 percent of Ukraine's annual GDP.

"I don't think it will be that high at all," Danylyuk said.

Ukraine's central bank said in March that the country's economic blockade of territory held by Russian-backed separatists would drag 2017 economic growth down to 1.9 percent from an earlier estimate of 2.8 percent.

(Editing by Louise Ireland)

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