Ukraine is still heading for a full-scale default on its public debt of $70bn, of which $40bn is owed by foreign creditors, and the rest by state or public entities. So Ukraine’s debt problems are also a reflection of the death throes of the International Monetary Fund, and I consider it quite possible that the fund itself might suddenly meet its demise, once its anniversary celebrations are over. It has already "technically" defaulted on a $550m Eurobond on October 5; Aurelius Capital and Elliot Management hedge funds are the suspected private bondholders, who, if Ukraine does not pay within 90 days of the default declared, can start eating into Ukraine's assets. The $3bn loan from Russia, due in December, is expected to default as well, since Ukraine does not have the money. At the same time, the International Monetary Fund (IMF), which is Ukraine's largest official creditor, is under increased pressure from Washington to rewrite the international rules in favour of Ukraine, so that Russia's debt can be treated as commercial credit. In other words, Russia will continue to hold Ukrainian assets until it pays off what it owes.
Ukraine is still heading for a full-scale default on its public debt of $70bn, of which $40bn is owed by foreign creditors, and the rest by state or public entities. It has already "technically" defaulted on a $550m Eurobond on October 5; Aurelius Capital and Elliot Management hedge funds are the suspected private bondholders, who, if Ukraine does not pay within 90 days of the default declared, can start eating into Ukraine's assets. The $3bn loan from Russia, due in December, is expected to default as well, since Ukraine does not have the money. At the same time, the International Monetary Fund (IMF), which is Ukraine's largest official creditor, is under increased pressure from Washington to rewrite the international rules in favour of Ukraine, so that Russia's debt can be treated as commercial credit. In other words, Russia will continue to hold Ukrainian assets until it pays off what it owes.