- US, Canada to increase financial aid to Ukraine
The UX Index was flat on Wednesday, and down by 0.6% in the US dollar terms, while the PFTS index was down by 1.0% in UAH terms. Seven out of ten companies in the UX index were down in the UAH terms with the largest decrease in prices observed for Bank Aval (-2.1%), Alchevsk MP (-1.5%) and Ukrnafta (-1.2%).
On the interbank exchange market, the USD/UAH spot rate was up by 0.6% with the closing price of 16.30 (mid price) on Wednesday, according to Minfin.com.ua, while the average exchange rate reported by the NBU was 15.87.
Ukraine 5-year CDS were down by 0.1% on Wednesday.
US, Canada to increase financial aid to Ukraine
According to the statement of the US Treasury Secretary Jacob Lew, the US Government is ready to extend the package of credit guarantees to Ukraine to USD 3 bn (from the previously announced USD 2 bn) in case reforms are implemented in the country. As was stated by Lew, the first tranche of credit guarantees could be provided to the country in 1H2015. He commented that the funds raised under the guarantees of the US government will be used to finance social projects and protect the most vulnerable segments of the population, as well as to adjust financial imbalances. Additionally, Lew noted that the US is waiting for the Ukrainian government’s further steps to address corruption, reform the energy sector and improve the business climate.
Moreover, according to the official press-release on the website of Canada’s Prime Minister Steven Harper, the country intends to grant another CAD 200 mn loan to Ukraine to further promote economic and social stability (Canada provided a first CAD 200 mn low-interest loan to Ukraine in September 2014). The second loan, which will be delivered by Export Development Canada, is part of a broader package of additional international assistance for Ukraine, and will be conditional on the approval of the next review of Ukraine’s IMF-supported program.
The news is POSITIVE for the Ukrainian economy. It seems that the international donors of Ukraine are gathering additional funds to support the country as it is faced with economic downturn and negative effect of the continuing conflict in Eastern Ukraine. The necessary condition for the provision of loans, as expected, remains the implementation of reforms program, which should provide the Ukrainian government with additional incentives to accelerate this process.
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