London, May 24 (Interfax-Ukraine) – Ukraine's good macroeconomic indicators in early 2011 mean the country can retain good positions on the loan market, despite the delay in its gaining financing under the Stand By Arrangement from the International Monetary Fund (IMF), according to a former finance minister and the Morgan Stanley Ukraine director, Ihor Mitiukov.
"Now GDP growth and the National Bank of Ukraine’s gross reserves are more than expected, which gives a chance to the government to win some time," he told Interfax-Ukraine.
"The market is calmly accepting the delay in the talks between Ukraine and the IMF, and we don’t see any irreversible and downward trends," he said.
He added that taking into account coming large payments on credits taken from the IMF in 2009, the resumption of cooperation with the IMF for Ukraine is very important.
Commenting on the situation on the domestic loan market, where the Finance Ministry has been reducing rates since early 2011, Mitiukov said that sellers should think not only about the results of each concrete auction, but also about more predictable and clear policy to the market, as well as not artificially reduce rates.
"The drawing up of the budget for next year and the implementation of the budget this year becomes less predictable in the present situation," he said.
Commenting on the situation on the international market, he said that the expected increase in rates has not started.
"I don’t think that this will occur before the summer holidays, but we see that some central banks are thinking of increasing their rates. An increase in the rates is inevitable, although it is impossible to predict when it will start – on September 1, or October 1, or January 1, 2012," he said.
As reported, the IMF decided to renew its loan partnership with Ukraine in the summer of 2010 through a new stand-by program. The approved stand-by program for Ukraine is 10 billion in special drawing rights (SDRs, worth around $15.6 billion), which is the IMF’s third biggest assistance program following those for Greece and Romania. In late July 2010, Kyiv received the first tranche of SDR 1.25 billion. The IMF decided in December to allocate a second tranche worth SDR 1 billion. The program foresees the future quarterly allocation of tranches, each worth SDR 1 billion, with the exception of the last tranche, which will be worth SDR 750 million.
