Russia won’t demand early repayment of US$3b lent to Ukraine

MOSCOW: Russia does not intend to demand early repayment of US$3 billion which it lent to Ukraine last year, President Vladimir Putin said in an interview with German TV channel ARD, a transcript of which was released by the Kremlin.

“If we do it (demand repayment) the whole financial system will collapse. We have already decided that we will not do it. We do not want to aggravate the situation,” Putin said.

“We want Ukraine to get on its feet at last.”

Under the terms of the loan, which Russian extended last Decemberintheformofapurchase of Ukrainian Eurobonds, Russia can demand early repayment if Ukraine’s debt exceeds 60 per cent of its gross domestic product.

Putin also said that Russia’s

If we do it (demand repayment) the whole financial system will collapse. Vladimir Putin, Russia president

state-owned Gazprombank had the formal right to demand early repayment of US$3.2 billion loans to Ukrainian energy company Naftogaz, but his remarks implied that it also would not do so.

Putin said that Western sanctions against Russian banks are harming Ukraine’s economy, as Russian banks have extended $25 billion in loans to Ukraine.

“If our European and US partners want to help Ukraine, how can they undermine the financial base limiting our financial institutions’ access to world capital markets? Do they want to bankrupt our banks? In that case they will bankrupt Ukraine,” Putin said.

Despite the sanctions, which he said were causing losses to Russia, Putin said he was confident that Russia’s economy would grow next year by 1.2 per cent, with 2.3 per cent growth in 2016 and three per cent growth in 2017.

His comments were at odds with forecasts by the Russian central bank, which projects growth of zero to 0.1 per cent over the next two years.

“Of course we expect the situation to change for the better. Of course we expect the Ukrainian crisis to end,” Putin said.

“Of course we want to have normal relations with our partners, including in the US and Europe.” — Reuters

Russia’s President Putin (left) answers questions of ARD channel’s representative Hubert Seipel during an interview for the channel in Vladivostok. Russia does not intend to demand early repayment of US$3 billion which it lent to Ukraine last year,...