US Offers $2 Billion Lifeline to Ukraine

The United States plans to provide up to $2 billion in loan guarantees to Ukraine this year, the U.S. Treasury said on Tuesday, as part of a broader international package to stave off bankruptcy.

Like other major donors to the country, Treasury said the guarantees would be contingent on the former Soviet republic remaining on track to meet the conditions of its loan program from the International Monetary Fund. IMF officials are in Kiev this week to resume negotiations on the package, currently worth $17 billion.

Ukraine’s government hopes the IMF’s visit will lead to a bigger aid program as its economy has been pushed close to bankruptcy by a pro-Russian separatist war in the east and the government faces huge debt repayments.

The cost of insuring exposure to Ukrainian debt rose to a new 5-1/2 year high on Tuesday, according to data from Markit, a financial information provider, amid fears the country may have to restructure its debt.

Ukraine’s foreign currency reserves were down to just over $7.5 billion at the start of the year, the lowest in 10 years and barely enough to cover five weeks of imports.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza