OREANDA-NEWS. On 30 July 2009 was announced, that IMF decided to provide the third tranche of its loan amounting to USD 3.3bn.The conditions of the loan remained the same as of the previous two tranches. At the same time Ukraine obliged to follow the restrictive fiscal policy, namely to increase gas tariffs for both population and enterprises, and recapitalize problem banks. Additionally, under the loan agreement Ukraine may spend USD 1.9bn of the third tranche on the redemption of its external debt (USD 0.5bn of the sovereign bonds, USD 0.5bn of Naftogas bonds, USD 0.25bn of Ukreximbank bonds).

Millennium Capital considers the news to be positive for Ukraine. Firstly, it will favor the revaluation of hryvnia to UAH/ USD 7.7 in August by our estimation, additionally favored by the decrease in the trade deficit. Secondly, IMF financing will decrease the issue of the local bonds, which will restrict the growth of consumer inflation, despite the expected growth in the utilities tariffs (20% in September). Finally, the loan will guarantee that at least sovereign Eurobonds will be redeemed in 2009, while Eurobonds of the state enterprises may be restructured in 2009.

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