Ukraine announced on Friday that it would not make payment on its $3 billion debt to Russia due this weekend, deepening a row with Moscow which said it would take Kiev to court.
Ukraine announced on Friday that it would not make payment on its $3 billion debt to Russia due this weekend, deepening a row with Moscow which said it would take Kiev to court.
The announcement essentially confirmed that Kiev will default on the bond come Sunday and unleash a protracted legal battle, though the immediate implications for its much-needed bailout package from the International Monetary Fund were unclear.
Speaking at a government meeting, Prime Minister Arseniy Yatsenyuk said that Ukraine “is imposing a moratorium on repaying the so-called Russian debt.”
“From today we are halting payments on this debt,” he said. “I stress, once again, that we are ready for a legal process with the Russian side.”
Russian President Vladimir Putin had orde-red his government to sue Ukraine if it defaults on the bond, after Moscow said that Kiev has rejected its offers of debt restructuring. Ukraine’s default could complicate their access to international financial markets.
