Russia to Unfreeze Ukraine Loans This Week

Russian President Vladimir Putin (R) and Ukrainian President Viktor Yanukovych sign an agreement in the Grand Kremlin Palace in Moscow, Russia, 17 December 2013. Photo by EPA/BGNES

Russia is expected to follow up on its promise to buy out Ukrainian government bonds by making a USD 2 B tranche this week.

"Russia will buy Ukrainian eurobonds to a total of USD 2 B", Russian Finance Minister Anton Siluanov told reporters, cited by Interfax.

The move is seen as an attempt to outmaneuver the West, which is also preparing a financial stimulus package to Ukraine, but is still unclear on the terms for it.

Russian President Vladimir Putin and his Ukrainian counterpart Viktor Yanukovych agreed on a USD 15 B loan in the form of buying Ukrainian government bonds, when the two met in December, amidst heated pro-EU protests in Kiev.

Following the escalation of violence in the Ukrainian capital, which led to a number of deaths and the resignation of the Prime Minister, Russia decided to put the loan on stand-by to see how the situation will unravel.

Meanwhile, an Amnesty Law is in force since Monday in Ukraine, which stipulates for the release of detained anti-government protesters. The move is seen as crucial to restoring peace in the country, as some protesters have begun lifting the street barricades.

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