Ukraine Consults with US and Western Countries on Foreign Currency Funding... Also Pursuing IMF Support

[Image source=EPA Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Ukraine is negotiating with the United States and other Western countries to secure billions of dollars in foreign currency and is seeking additional funding support from the International Monetary Fund (IMF).

According to major foreign media on the 17th (local time), Serhiy Marchenko, Ukraine's Minister of Finance, said in an interview that discussions are underway to create a system that would allow the United States and other countries to transfer IMF Special Drawing Rights (SDRs) to Ukraine.

SDRs are rights that IMF member countries can exchange for major currencies such as the dollar, euro, yuan, yen, and pound as needed when foreign exchange liquidity is insufficient. Receiving SDRs from the IMF would enable Ukraine to secure major foreign currencies like the dollar. This is being pursued to mitigate economic damage amid the threat of Russian invasion.

Minister Marchenko also expressed hope that the U.S. would sign the loan guarantee agreement soon, referring to U.S. Secretary of State Antony Blinken's announcement on the 14th that the U.S. would provide up to $1 billion (approximately 1.2 trillion won) in loan guarantees to Ukraine. He emphasized, "The mechanism is simple. The U.S. guarantee means we can borrow money at a AAA rating."

Additionally, Marchenko stated that Ukraine expects to receive half of the €1.2 billion (approximately 1.6 trillion won) loan pledged by the European Union (EU) by early April and to receive a loan from Canada in March, while also negotiating with Japan.

Recently, geopolitical risks have sharply increased, leading investors to sell off Ukrainian government bonds, effectively blocking Ukraine's access to international financial markets. The yield on dollar-denominated Ukrainian government bonds has exceeded 10%, leaving Ukraine reliant on Western capital.

Minister Marchenko revealed that Ukraine plans to receive the remaining $2.2 billion from the existing IMF support program in the first half of the year and hopes to reach an additional agreement with the IMF to secure more funds. However, negotiations related to this are expected to begin only in the second half of the year after the current support program ends.

This content was produced with the assistance of AI translation services.