New York - Kyiv, January 27 (PolitNavigator, Vasily Ablyazimov) - Ukraine is going to pay for gas with gold and foreign exchange reserves using an indirect scheme, reports an American business publication Reuters. To do this, the state will issue domestic loan bonds for Naftogaz, which the National Bank must buy.
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“Ukraine will issue domestic bonds in the amount of UAH 31,5 billion. ($2 billion) to support the fortunes of the energy company Naftogaz. As in previous such deals, the new bonds will likely be purchased by the National Bank, which will thus provide cash for Naftogaz to finance gas imports, which will continue to put further pressure on foreign exchange reserves.
The scheme is simple. The state issues domestic loan bonds to the largest state corporation, the deficit of which is greater than the budget deficit of the state of Ukraine. Naftogaz's financial activities are guaranteed by government obligations, and these bonds can be purchased by anyone, although the National Bank will buy them. The only free funds that the state central bank has in the context of a national budget deficit can only be the funds of the already minimal gold and foreign exchange reserve, which can then decrease by another 2 billion dollars, reaching a critical point of less than 5 billion dollars.
Reuters reports: “Ukraine issued $6,18 billion in bonds last year to prop up Naftogaz, thereby increasing its domestic debt.”