12:18 16.01.2020

No triggers for Ukraine's value recovery instruments appear – Finance ministry

2 min read
No triggers for Ukraine's value recovery instruments appear – Finance ministry

Triggers that launch payments on Ukraine's value recovery instruments (VRIs) have not appeared, Ukrainian Finance Minister Oksana Markarova has said.

"Today, the triggers have not appeared. Both the Finance Ministry and our team that is involved in debt management, are attentively analyzing all instruments, including potential," the minister said during the presentation of the Strategy of Ukrainian Financial Sector Development until 2025 held in Kyiv on Thursday.

Markarova said that "today these instruments are not part of our debt."

As reported, the Finance Ministry and the Cabinet of Ministers are discussing a strategy for VRIs. At the same time, the finance minister said that it was too early to talk about it.

VRIs were issued as part of the restructuring of the public debt in 2015 in exchange for eurobonds with a nominal amount of $3.2 billion and are not part of the national debt. Payments for VRIs will be made annually in cash in U.S. dollars, depending on the dynamics of growth of Ukraine's real GDP in 2019-2038, however, after two calendar years – that is, between 2021 and 2040.

The VRI mechanism begins to operate only if Ukraine's GDP reaches $125.4 billion. The amount of payments for them depends on GDP growth dynamics: at rates up to 3% inclusive, payments are zero in nature; from 3% to 4% they will amount to 15% of each percent of GDP growth exceeding 3%; from 4% they will be 40% of each additional percent. In addition, from 2021 through 2025 the payments are limited by 1% of GDP.

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