Ukraine meticulously fulfilling debt obligations, sets up fund to service, repay sovereign debt - PM

KYIV. March 29 (Interfax-Ukraine) - Ukraine is continuing to meticulously fulfill its debt obligations and has set up a fund to service and repay the sovereign debt, Ukrainian Prime Minister Denys Shmyhal said.

"Ukraine has always fulfilled its obligations in a meticulous fashion. This is a matter of the state image. On March 1, the Ukrainian Finance Ministry made a coupon payment of $292 million on Eurobonds. The next large payment is due in September, so there is no reason for talk about writing off debts," Shmyhal said on Tuesday.

Confidence of foreign creditors is important to Ukraine, he said.

"We want to lend money, receive grants and have stable relations with our foreign partners, so we need to be responsible," Shmyhal said.

"We have set up a fund to service and repay the sovereign debt. We are counting on understanding of the situation and the filling of this fund," he said.

The government is discussing support for Ukraine with European and U.S. partners, other nations, international organizations, and the corporate sector, Shmyhal said.

"As for countries, the work is done in several stages. Firstly, budget revenue will be provided. Secondly, there will be global support for macro-financial stabilization. Thirdly, there is a matter of our future, the fund of Ukraine's rejuvenation. This is a recovery plan," he said.

Meanwhile, the Ukrainian Gross Domestic Product (GDP) has dropped 35% or more as a result of the latest events, Shmyhal said.

"We are observing fluctuations of 35% or a bit larger," Shmyhal said.

"Later on, everything will depend on how the economy and business will recover, as well as on export sectors, which are shifting from marine to rail transportation via Eastern Europe. All these factors will have an effect on the GDP," he said.

According to Shmyhal, the Ukrainian government is ready to offer UAH20-billion loan guarantees for sowing in spring 2022, although it is aware of the related risks.

"We are aware of all risks, yet we are ready to give state guarantees totaling UAH20 billion. I mean we guarantee loans, being aware of the existent risks," Shmyhal said.

Back on March 26, the Ukrainian government allowed loans to agrarians so that they could buy materials for the spring sowing, Shmyhal said. Hence, government guarantees for sowing loans were increased to UAH1.5 billion per entity to make funding available to small and medium businesses.

Shmyhal said that sowing data would be available in April.

"The sowing has successfully begun, and 5% more winter crops have been planted, compared to last year. Of course, there will be fewer spring crops. We are expecting an approximately 30% decrease in acreage. Yet we will see all numbers only in April," he said.

According to Shmyhal, Ukraine has opened borders for humanitarian cargo in order to support national production and to ensure necessary imports, such as foods, drugs, fuel, essentials, household chemicals, and hygiene products.

"We have scrapped the VAT, customs duties and all inspections but desk and factual audits, there is only control of prices and facilities where violations can have severe consequences for health and safety. There are no checks of bona fide businesses. From the business point of view, there are the fastest customs clearance procedure and the easiest 2% taxation system, while we offer business a choice whether to accept these innovations or not," Shmyhal said.