Creditors Confirm Two-Year Freeze on Ukraine’s $20 Billion Debt, PM Confirms

Ukraine’s lenders have agreed to postpone payment of its $20 billion (19.4 billion euro) due to the Russian invasion having a significant negative impact on the country’s economy. 

“Investors in Ukraine’s foreign debt agreed to postpone payments until 2024. It allows Ukraine to maintain macro-financial stability and strengthen economic sustainability”, Ukrainian Prime Minister Denys Shmygal said on Twitter.

“Ukraine will save almost $6 billion on payments, Shmyhal added. “These funds will help us maintain macrofinancial stability, strengthen the sustainability of the Ukrainian economy, and improve the power of our army.”

According to the finance ministry, holders of approximately 75% of Ukraine’s debt agreed to the pause.

Last month, a group of Western nations, including Britain, France, Germany, Japan, and the United States, agreed to let Ukraine defer interest payments on its debt and invited other nations to participate in the initiative.

“The two-year debt freeze makes sense because even if the war ends soon, Ukraine’s situation is not going to improve overnight,” stated Stuart Culverhouse, chief economist at the research company Tellimer in London.

“Creditors were even surprised that the country decided to be current on the bonds until now.”

Among the largest holders of Ukraine’s debt, whose market value has plummeted by more than 80% since a build-up of Russian troops on its borders began late in 2021, are BlackRock Inc (BLK.N), Fidelity International, Amia Capital, and Gemsstock Ltd.

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