You're reading: IMF says it may provide funds to Ukraine even if creditors don’t agree to restructure debt

MOSCOW/WASHINGTON - The International Monetary Fund (IMF) is ready to continue financing the Ukrainian government even if creditors are unpaid, IMF First Deputy Managing Director David Lipton said, according to the Bloomberg news agency.

“We have a policy of lending into arrears which allows us to continue lending to a member state when it has arrears with private creditors, providing it’s fulfilling all its other commitments that it’s made to us,” he said.

He signaled the emergency lender could disburse its next tranche of bailout cash to Ukraine despite gridlocked debt-restructuring, bolstering the beleaguered nation’s leverage in negotiations with creditors, The Wall Street Journal said.

IMF officials had previously said it was critical for Kyiv to reach a restructuring deal with its creditors before the fund approves its next loan payout.

After Lipton’s comments Ukrainian July 2017 notes fell by 1.4 cents, to 51.16 cents per $1 of the face value, while they had previously been growing in price.

“We expect the Ukrainians to push for a deal with whatever terms that will satisfy” the fund’s debt-sustainability criteria, Lipton said.

Finance Minister of Ukraine Natalie Jaresko said in an interview with Dzerkalo Tyzhnia weekly that the achievement of an agreement on restructuring eurobonds by Ukraine is not a crucial condition for providing the next $1.7 billion to Ukraine by the IMF.

Jaresko said that the government has a plan B and a plan C. She did not specify the details of the plans.