Bloomberg Anywhere Login


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Ukraine Seeks to Extend VTB Loan to Help Current Account

Nov. 3 (Bloomberg) -- Ukraine will seek to extend its $2 billion loan from VTB Group, Russia’s second-largest bank, to support its current account, Investment Capital Ukraine said.

VTB loan may be extended to June next year and further to 2014-2015, Kiev-based Investment Capital Ukraine, or ICU, said in its quarterly report e-mailed late yesterday. Ukraine may get additional financing of between $4 billion and $5 billion from the Russian government, it said.

“The deal with the Russian government looks more realistic than that with the International Monetary Fund, which attached socially sensitive requirements to its loans,” the ICU said. The agreement would “slow down market fears over the future conditions of the balance of payments.”

Ukraine is relying on a $15.6 billion stand-by loan program with the Washington-based IMF. After disbursing two tranches of total $3.4 billion, the IMF has halted Ukraine’s payments since March this year, demanding an increase in local gas tariffs to compensate the price for gas imports from Russia.

Extending the VTB loan will probably be part of a larger agreement with Russia that includes natural gas supplies and trade, according to the investment bank ICU. Ukraine’s authorities are in talks with Russia to reduce the price paid for natural gas deliveries and cut annual volumes.

Washington Talks

Finance Minister Fedir Yaroshenko and Deputy Prime Minister Serhiy Tigipko left yesterday for Washington for about two days to hold “consultations” with the IMF, Vitaliy Lukyanenko, a spokesman for Prime Minister Mykola Azarov, said in a telephone interview today from Kiev.

The mission of the lender arrived in Kiev on Oct. 25 and the visit is scheduled to end tomorrow.

Ukraine’s current-account deficit widened in the third quarter from the same period a year ago to $2.6 billion, the biggest gap since the final three months of 2008. The shortfall will probably widen to 4.5 percent of gross domestic product this year, said Ihor Shumylo, the head of the central bank’s economic department, on Oct. 28.

The nation received the six-month VTB loan in 2010 and had it extended in December 2010 and in June. The loan has an interest rate of 6.7 percent.

The ICU sees “quite a marginal” weakness of the hryvnia at the end of this year and the beginning of 2012 as gas prices will peak in the last three months of this year and in the first quarter of 2012.

Hryvnia Rate

The hryvnia’s rate may move from a range of 8.2-8.4 to the dollar to 8.0-8.1 per dollar in late 2012 and in the following two years, the bank said.

A decline in demand and prices for Ukraine’s steel, which adds pressure on current account balance, is believed temporary by ICU “with a likely recovery coming” in first two quarters of next year.

Ukraine’s steel exports will probably fall 5 percent to 5.2 million metric tons in the fourth quarter of this year in comparison to the third quarter, the ICU said.

To contact the reporters on this story: Kateryna Choursina in Moscow at

To contact the editors responsible for this story: Claudia Carpenter at;

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.