Russia may declare a default in Ukraine if Kiev doesn’t settle $3million bonds with Russia, announced the Head of the Ukrainian Ministry of Finance Natalia Jaresco. According to her, Kiev authorities can not perform the appropriate payment because the expenses of Ukraine are limited by the IMF program.


The Ukrainian Government admits that Russia may declare a default of Ukraine if Kiev doesn’t pay the $3 million debt to Russia, announced the Ukrainian Minister of Finance Natalia Jaresco on Ukrainian television.


‘If we don’t make this payment, it’s possible. But I believe that it is too early to think about what we will do and what they will do… It would be a speculation from both our and their side. We’re all getting ready for all possible options,’ she said.


As she pointed out, at the moment Kiev can not settle with Moscow because the parameters of the possible payments under the IMF program are not clearly defined. At the same time Natalia Jaresco announced readiness to negotiate with the Russian Minister of Finance Anton Siluanov.


Ukraine still has not paid the $3 million debt to Russia. The Ukrainian authorities refused the offer of the Russian Federation to restructure the debt and said that they didn’t intend to pay off, at least until the end of the year.


The Finance Minister of Ukraine informed that the IMF wasn’t ready to help Kiev pay the debt to the Russian Federation but she expressed hope that the financial obligations to Moscow wouldn’t affect the program of Ukraine’s cooperation with the Fund. Jaresco pointed out that this international financial structure ‘is ready to review its policy regarding debts to official creditors’.


Meanwhile, according to Bloomberg, Russia is now looking for ways to block the next IMF tranches to Ukraine if Kiev eventually admits its default. The Head of the Russian Ministry of Finance Anton Siluanov said earlier that Russia might use its right of a sovereign borrower and require that the Fund declare the program of financing Ukraine insolvent.