UPDATE2: Moscow says doesn’t support IMF tranche to Kiev

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MOSCOW/KIEV, Sep 15 (PRIME) -- Moscow does not support the International Monetary Fund’s (IMF) decision to provide the next tranche of financial aid to Ukraine, the Russian president’s press secretary Dmitry Peskov told reporters Thursday.

“We do not support such decision, we are against,” he said.

The IMF said Wednesday that its executive board had approved providing a U.S. $1 billion tranche of financial aid to Ukraine.

IMF Managing Director Christine Lagarde said after the board meeting that “Ukraine is showing welcome signs of recovery, notwithstanding a difficult external environment and a severe economic crisis.”

Valeria Gontaryova, head of the Ukrainian central bank, said at a news conference that Kiev expects to receive the $1 billion tranche on Friday.

The four-year financial assistance program for Ukraine encompasses allocation of a total of $17.5 billion. In March 2015, the first, $5 billion tranche was allocated, and the second, $1.7 billion tranche was provided in August of that year.

On Monday, Russian Finance Minister Anton Siluanov said Moscow would vote against the new tranche of financial aid to Ukraine. The IMF financial assistance program for Ukraine should have included Ukraine’s repayment of a $3 billion debt to Russia, but this was not done, Siluanov said then.

Alexei Mozhin, IMF executive director for Russia, told PRIME that only Moscow voted against the allocation of the $1 billion tranche to Ukraine.

Sergei Kalashnikov, first deputy head of the Federation Council’s economic committee, said that the allocation of the IMF tranche to Ukraine will complicate Kiev’s debt repayment to Russia.

Siluanov told Rossiya 24 television channel on Thursday that Moscow will continue defending its position over the Ukrainian $3 billion debt and is ready to consider constructive offers.

“A decision was made, the Russian Federation’s voice was heard, but it certainly was not the key one. That’s why we will further defend our rights, we are talking about a trial that is to start at the beginning of next year. If the Ukrainian side makes constructive offers to settle our dispute, we are ready, as was announced earlier, to consider these offers in pre-trial proceedings. But on condition that these offers are better than those for commercial creditors,” Siluanov said.

Russia bought Ukraine’s $3 billion 2-year Eurobonds in December 2013 and rejected restructuring conditions offered by the country to its commercial creditors. Kiev insisted that the terms of debt repayment to Russia are the same as for private creditors. The IMF has recognized the Eurobond debt to Russia as sovereign.

In February, Russia filed a lawsuit with the High Court of London demanding that Ukraine pay the main debt of $3 billion, as well as $75 million of the last coupon income and additional interests accrued since December 20, 2015, the maturity date of the bonds.

The court will start hearing the suit on January 17, 2017, Siluanov said earlier.

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