Ukraine will not soon return to foreign markets of loans – the former head of the NBU

Украина не скоро вернется на внешние рынки займов - экс-глава НБУ

The Ministry of Finance declared time of return to foreign markets of loans in 2018 do not correspond to reality, I’m sure Watermelons.

Ukraine will not be able to return to foreign borrowing markets in 2018, according to former national Bank head Sergei Arbuzov. This opinion he expressed, commenting on the Minister of Finance announced the return of Ukraine to the markets of foreign borrowing.

About the reasons of impossibility of returning to the markets of the loans it wrote in Facebook.

“First, over the past year, Ukraine has suffered a serious loss of reputation in the eyes of the international financial and investment community. Prolonged political crisis, a pause in cooperation with the IMF because of the failure by the authorities of the commitments and advance in reforms, high-profile corruption scandals – that’s the emphasis of publications in the foreign press. This will inevitably be a disappointment in the authorities ‘ability to pull the economy out of a deep crisis”, – he wrote.

The second reason, according to Arbuzov, is that by 2018, the Ukraine is still not out of the economic crisis. This is evidenced by at least the IMF forecast, according to which the GDP will be only 90,3% from the 2013 level. “In addition, according to the results of 2008, Ukraine was in the list of 100 worst financial crisis since the 1860-ies, compiled by scholars at Harvard University. According to this study, the recovery of the economies after severe financial crises for emerging markets drag on for 8-10 years. Ukraine did not overcome the effects of the recent global financial crisis, have plunged in 2014-2015 in new triple (currency, banking, economic) crisis. This year marked only the first signs of relief” – recalled Watermelons.

Thirdly, according to the former head of the NBU, investors pay attention to the history of debt governments-borrowers.

“Previous defaults have negative consequences for governments in the medium term. There is a close connection between the size of debt forgiveness in the restructuring process and the subsequent conditions of the loan to the state. Large losses for creditors entail significantly higher spreads after the restructuring and the longer the period of exclusion from markets”, – said Arbuzov.

We will remind that earlier the Minister of Finance, Aleksandr Danilyuk, said that Ukraine plans to return to practice of placing of bonds in public external borrowing markets in 2018. In his opinion, this will be possible thanks to the continued cooperation with the IMF and reform in the country.