Ukraine wants its foreign debt written off

RT
Tue, 01 Mar 2022 13:39 UTC

Ukraine has called on international financial organizations to cancel the country's foreign debts claiming massive destruction in the country caused by the Russian military offensive that began last Thursday.

"The scale of destruction in Ukraine ... is colossal! In view of this, our external creditors must be required to write off Ukraine's debts."

To date, the external debt is 1.6 trillion hryvnia, or more than $57 billion.

The head of the Accounts Chamber of Ukraine, Valeriy Patskan, wrote on his Facebook page on Tuesday:

"The International financial organizations should revise the debt policy and zero out the debts of Ukraine!"

Russia launched a military operation in Ukraine last Thursday. President Vladimir Putin said its goal is "the protection of people who have been subjected to bullying and genocide by the Kiev regime for eight years," referring to the shelling of the two Donbass republics, which broke away from Ukraine in 2014.

Russia's Ministry of Defense has been repeatedly stating that its armed forces target only the military infrastructure and Ukrainian troops, not the civilian population. However, many Western states see the military operation as an "unprovoked" aggression against Ukraine, hitting Moscow with sanctions.

Comment: China lowers Ukraine sovereign debt rating:

A major Chinese rating agency has joined the world's three dominant credit assessors in cutting Ukraine's creditworthiness after Russia's invasion, as the conflict between the two countries dramatically increased the cost of their sovereign loans.

Rating agency China Chengxin International announced on Friday that it had lowered Ukraine's sovereign rating two notches to the non-investable, or junk, grade of CCCg, saying the country could fall into deep recession this year in the aftermath of Russia's invasion. Beijing-based Chengxin said:
"The sudden geopolitical incident will have an all-around negative impact on Ukraine, including an accelerated economic recession, soaring fiscal burdens, a sudden rise in fragility and systemic risks. Its sovereign repayment capability will be damaged,"
Its rating is now in the same category as Venezuela and one notch lower than Myanmar.

The agency warned that Ukraine would face much higher risks in international markets and its forex reserves of US$27.7 billion would not be able to cover sovereign debt maturing this year.
"The outbreak of war will put further pressure on the Ukrainian economy, as it will devastate its industrial and agricultural production capacity, upend investor confidence and lower export orders. Its economy is expected to fall into a deep recession in 2022.

"Beyond Ukraine, the repercussions of the conflict pose significant economic risks in the region and around the world."