Lagarde believes that the conversation with Poroshenko were constructive

The managing Director of the IMF Christine Lagarde called constructive conversation with President of Ukraine Petro Poroshenko to discuss her harsh statements about the situation in Ukraine. This is stated in the official document circulated by the international monetary Fund, reports «UKRINFORM».

The state Department commented on the statement by Lagarde on Ukraine
Warning Lagarde could push the hryvnia to the reduction — bankers

«I had a constructive discussion with President Petro Poroshenko regarding the issue raised in my statement to the press on Wednesday morning,» said the head of the IMF.

According to her, Poroshenko has assured of its commitment to reforms, including improving governance and fighting corruption».

While Lagarde informed about reaching a «principled agreement on a road map of actions and priority actions to ensure rapid progress within the program (IMF – ed.) that will help to keep Ukraine on the path to robust and sustainable growth».

As reported, the managing Director of the IMF, Christine Lagarde made a statement on Ukraine, which expressed doubt that our country will be able to successfully implement the program supported by the IMF.

The Minister of Finance of Ukraine Natalia Jaresko, commenting on the position of head of the IMF, called her a call to accelerate reforms in Ukraine.

The state Department commented on the statement by Lagarde on Ukraine

The United States supports Ukraine in overcoming the serious economic problems, however, stress the importance of defeating corruption in the country. Commented on Monday the statement by Christine Lagarde on the concerns about the situation in Ukraine, assistant press Secretary for the U.S. State Department mark Toner.

«We support the efforts of Ukraine regarding the settlement of its economic and financial chaos, which includes addressing issues of corruption among other really serious economic problems», — said the representative of foreign policy Department of the USA.

He stressed that the United States will remain committed to supporting the efforts of Ukraine to overcome «a very serious economic situation» in the country, recognizing that it is «critically important deal with long-term stability.»

Warning Lagarde could push the hryvnia to the reduction — bankers

Warning, managing Director of the International monetary Fund (IMF) Christine Lagarde on the possible suspension of cooperation with Ukraine under the EFF program from slow reform of public administration and a lack of effective fight against corruption could push the hryvnia to decline, according to the bankers, transfers «Interfax-Ukraine».

«The statement by Lagarde does not contribute to the strengthening of the hryvnia, and, no doubt, will lead to its weakening. It is likely to expect that would be the best achievement abroad of 26.0-26,2 UAH/1$, where the hryvnya would remain in expectation of positive news», – said the first Deputy Chairman of the Board Prominvestbank Vyacheslav Yutkin.

According to him, this statement by the managing Director of the IMF indicates serious slippage of the key reforms in Ukraine. «I think that is largely the reason for such sharp statements have become the story associated statements Abromavicius (aivaras abromavicius – Minister of economic development and trade – ed.) about corruption in the Pro-presidential faction,» added the banker.

Chief economist of Alfa-Bank (Ukraine) Oleksiy Blinov, in turn, noted that the recent tensions on the foreign exchange market reflects the awareness of its player of the fact of extinction likely to soon produce the next tranche of credit for the IMF programme, which linked income from external donors.

«Progress in anti-corruption strategy is a key prerequisite for the receipt of the third tranche of the EFF programme. Since Ukraine generates negative news in this sector, the foreign partners will not be able to decide on new loans to noticeable remedy the situation», – the expert added.

According to him, the termination of Ukraine’s cooperation with donors means the realization of the pessimistic scenario in the economy with the weakening of the hryvnia by 10-20%.

«Until the end of 2016, Ukraine will have to pay monetary debts, including maintenance, about $ 3 billion. It is obvious that in the absence of revenue from external donor reserves of the Central Bank quickly go back to the uncomfortable area, and net assets becomes negative. Additional pressure on the reserves would provide and the need for currency interventions amid a widening foreign trade deficit. Offsetting of foreign exchange inflows in the financial account under such conditions is also not expected. Overall, the final termination of cooperation with donors means the realization of the pessimistic scenario in the economy with the weakening of the hryvnia by another 10-20%, the inability to perform the stated goals of the NBU on inflation and the absence of positive dynamics of GDP by the end of 2016,» – said Blinov.

Chief expert of the division for operations in the foreign exchange and money market OTP Bank Nikita Mishakov believes that the statement by Lagarde will have only indirect influence on the hryvnia.

«Hryvnia devaluation is inevitable. In itself, the statement by Ms. Lagarde is unlikely to affect its pace, unlike the final refusal of international lending organizations,» – said the expert.

In his estimation, to keep the hryvnia from devaluation, the national Bank will be forced to increasingly resort to administrative measures.

«The regulator to keep the course on the indicators of no higher than 26 UAH/1 USD. In terms of potential rejection there is a possibility to neglect the demands of the IMF regarding free-floating exchange regime. Thus, the floating of the rouble will depend solely on the opinion of the NBU on this issue,» said Mishakov.

Chief economist Department of strategic planning at Ukrsotsbank Andrey Prikhodko believes that the statement by Lagarde will not have a significant impact on the hryvnia.

«In our view, the effect will be minimal. In current quotations of the already inherent risks of the delay of the next IMF tranche. Moreover, as the hryvnia exchange rate is very strongly influenced by administrative measures of the national Bank, situational to shake up the course on the background of bad news is only possible at the inactivity of the national Bank, that is unlikely,» he said.

Thus Prikhodko added that a complete cessation of EFF program is unlikely.

«Termination of the extended Fund facility, in our view, unlikely on the basis primarily for political reasons. In addition, it will be obvious defeat by the IMF as an institution. As against the EFF program, the Fund voted, and was actively opposed by Russia and other BRICS countries who want to expand their role in the organization. The failure of the EFF programme is a strong argument for these countries, confirming that the current policy of the Fund, to put it mildly, is imperfect,» he said.

Lagarde believes that the conversation with Poroshenko were constructive 11.02.2016

Февраль 11th, 2016 by
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