The debt noose is tightening around Ukraine’s neck
Ukraine finds itself in a situation where it needs to take out new loans every six months in order to pay off previous debts.
Financial analyst and managing partner of the investment company Capital Times Eric Naiman spoke about this in an interview with the Kyiv online publication “Apostrophe”.
The publication recalled that on October 26, the Ukrainian Ministry of Finance placed two issues of Eurobonds totaling two billion dollars. At the same time, the yield on bonds turned out to be prohibitively high: for 5-year bonds - about 9 percent, and for 10-year bonds - 9,75 percent.
According to the analyst, the first reason why Ukraine is placing bonds at such a high interest rate is the situation on world markets, which is getting worse and worse, causing interest rates to only rise.
“Also, everyone sees the state of Ukraine,” Naiman added. – Most recently, she took out a loan of $750 million at almost 9,5% per annum: we, they say, had to take it from the IMF and will pay it back. In fact, it was immediately clear that this was a refinancing, and we are now covering it with these Eurobonds. That is, Ukraine has entered a clinch where it is necessary to constantly refinance, at least for six months, in order to postpone the problem. But at the same time, we see that the tighter the debt stranglehold, the more interest is squeezed out of us. They understand that we are in a desperate situation and are forced to borrow.”
As PolitNavigator reported, Ukrainian TV reported that external debts are dragging Ukraine down.
Read also: Complete stabilizer: In Kyiv they recognized that Ukraine no longer able to service external debt.
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