Dec. 10 (Bloomberg) -- Ukrainian President Viktor Yanukovych proposed lawmakers to return Mykola Azarov as Prime Minister.
The new parliament will convene for the first time after the Oct. 28 election on Dec. 12 and will probably vote on Azarov’s nomination the same day, according to a statement on the website of the Ukrainian president.
Yanukovych last week dismissed the entire Cabinet before talks with the International Monetary Fund on a new loan program were to begin. The Washington-based lender delayed its visit, scheduled for Dec. 7, to the second half of January after the government resigned. Azarov’s re-appointment means that talks will be “difficult,” said Ivan Tchakarov an economist at Renaissance Capital in Moscow.
“This may be taken as somewhat disappointing by the market as hopes were running high of Yanukovych appointing a new face that will make the negotiations with the IMF easier,” Tchakarov said in an e-mailed note today. “A new IMF programme, if coming at all, is not possible before the winter season is over.”
The hryvnia traded at 8.125 per dollar at 1 p.m. in Kiev, compared with 8.1637 on Dec. 7. The benchmark Ukrainian Equities Index fell 1.2 percent to 914.34, snapping a five-day rally that took it to its highest in two months at the end of last week.
Yanukovych’s ruling Party of Regions won parliamentary elections in October. Ukraine needs an IMF program for the third time in five years to stabilize its economy and manage foreign-debt payments due next year.
Ukraine received $3.45 billion of its $15.4 billion stand-by loan agreement signed in 2010 before the facility was frozen as authorities refused to meet the IMF’s request of raising utility rates for households.
Since then, its international reserves have plunged to $25.4 billion from $38.2 billion last August as the central bank used its stockpile to bolster the hryvnia.
Ukraine must repay $5.7 billion to the IMF in 2013, according to the lender’s website. It has more than $4.3 billion of additional foreign-debt obligations to meet next year, Kiev-based Dragon Capital said in an e-mailed note on Dec. 3.
As the next premier, Azarov will have to manage an economy that contracted 1.3 percent from a year earlier in the third quarter as the euro-area debt crisis damped demand for exports such as steel.
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