The Ukrainian government has negotiated a deal with its largest creditors to reduce $18 billion dollars of debt by 20% totalling $3 billion. 

Reports say that Kiev had initially requested a 40% write down, the final number agreed being half of this. Additionally, the maturity of much of the debt has been extended by four years to give the Ukrainian economy time to grow.

Finance Minister, Natalia Yaresko said the deal was a ‘win-win’, where its creditors will be repaid and the Ukraine will be able to keep itself afloat. The country currently has a $15 billion budget deficit due to the economic collapse surrounding the conflict in the east of the country with Russian separatist rebels.

She added that the agreement meets all targets set by the International Monetary Fund.

Ukraine’s bond prices increased over 8% on the news suggesting it will be positive for the economy.

Russian Involvement

Notably, Russia are not partaking in any restructuring deal. A $3 billion Eurobond is due for full repayment in December to Russia. The lowering of Ukrainian debt repayments will give the country greater ability to pay this.