11:17 05.02.2018

Finance ministry seeks to borrow 46.6% out of UAH 232 bln in 2018 on foreign market

3 min read
Finance ministry seeks to borrow 46.6% out of UAH 232 bln in 2018 on foreign market

 The Finance Ministry of Ukraine, taking into consideration the national budget for 2018, plans to place debt tools for UAH 231.96 billion this year, including UAH 108.2 billion on foreign markets of 46.6% of the total sum, according to the state debt governance program for 2018 approved by the ministry on January 31 and published on February 1.

"According to the forecast calculations, long-term tools will have the largest share - 55.1%, medium-term tools will be 31.9%, short-term tools - 12.9%," the Finance Ministry said.

The ministry said that fixed-rate debt tools will roughly amount to 92.3%, and floating-rate tools - 7.7%.

The Finance Ministry said that the special fund is expected to attract funds from international financial institutions (IFIs) to finance economic and budget development projects in the amount of UAH 17 billion.

According to the program, the total payments for state debt in 2018 at the expense of the national budget are estimated at UAH 305.93 billion, of which the external debt - 36.8%, or UAH 112.56 billion.

"The share of expenditures on servicing the public debt of the expenditures of the general fund of the national budget for 2018 will approximately amount to 14.3%," the Finance Ministry said, specifying that the volume of payments for servicing the public debt is forecasted in the amount of UAH 130.2 billion, of which 39.1%, or UAH 50.86 billion for the external debt. Including Ukraine must pay UAH 27.31 billion for restructured 2015 eurobonds, UAH 6.66 billion for 2017 eurobonds, UAH 5.2 billion and UAH 3.11 billion for loans of the IMF and IBRD respectively.

Under the program, payments for the repayment of the state debt for this year are planned in the amount of UAH 175.73 billion, of which 35.1%, or UAH 61.7 billion for the external debt (of which UAH 43.8 billion to the IMF, UAH 8.34 billion to the IBRD, and UAH 3.82 billion to the EBRD).

The Finance Ministry said that the volume of repayment of the state domestic debt can be increased if early repayment of dollar-pegged bonds takes place and if the volume of issuance of short-term government bonds with maturity in 2018 increases, as it will require a corresponding increase in borrowings.

So far, it is expected that at the end of 2018 the direct state debt will not exceed UAH 1.999 trillion, of which 62.4% will be accounted for foreign debt, and 66.7% for debt in foreign currency.

The Finance Ministry predicts that the average maturity will be seven years, while the share of short-term and medium-term tools it will be 1.3% and 20.2% respectively.

According to the program, the size of the national debt may be increased due to the growth of the hryvnia exchange rate, as well as if state-owned banks and the Individuals' Deposits Guarantee Fund are additionally capitalized.

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