30 Июля 2018

Ukrainian sovereign Eurobonds rose sharply last week after acting Finance Minister Oksana Markarova said on Bloomberg Television that she expects a resumption of funding from the IMF, citing constructive negotiations on the remaining budget issues. Since July 2017, Ukraine has been in a stalled negotiating process with the IMF on the natural gas pricing issue: the IMF insists on raising the price of gas for households, an increase which, according to various estimates, should be somewhere between 30% to 60% due to rising prices on international markets, but the government has refused to take this step. IMF Managing Director Christine Lagarde said last month that the implementation of the precondition for natgas prices is critical for the completion of the current review of the IMF-supported program. The longest outstanding issue, Ukraine-32s, jumped by 3.1% to close at 90.7/91.7 (8.5%/8.4%) and the medium-term Ukraine-23s issue added 2.1% to 100.4/101.1 (7.7%/7.5%). The VRI derivatives (linked to Ukraine’s future GDP growth with expiration in 2040) were less active, edging up 0.3 to 63.1/64.2 cents on the dollar.