That effectively means that Ukraine is defaulting on the debt.
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Yatsenyuk announced the payment freeze at a government meeting in Kiev, contending the step was needed after Russian Federation refused to join the restructuring. The decision by the IMF puts further funds in jeopardy, unless Kyiv can agree to a refinance deal, or pay the debt in full.
North Atlantic Treaty Organisation is examining ways to step up cooperation between alliance special operations forces and Ukrainian troops, pushing forward with a partnership at a time when Moscow is acknowledging the presence of Russian operatives in Ukraine’s troubled east.
Ukrainian Finance Minister Nataliya Yaresko said late Friday she hoped the dispute could still be resolved but Kremlin spokesman Dmitry Peskov discounted that possibility, saying “there is only the court prospect”.
In addition, repayment of $507m of Ukrainian commercial debt held by Russian banks will also be halted.
William Jackson, an emerging markets analyst at Capital Economics, said the implications of the moratorium were unclear. “Why can’t these risks be shared to four years?”
Russia’s economy is expected to contract by 3.8% in 2015 due to low oil prices and European Union sanctions over its intervention in Ukraine.
On Aug. 27, a group of the country’s largest creditors, including investment firm Franklin Templeton, which owns around half of the country’s outstanding debt, accepted a 20 percent write-off on $18 billion in outstanding bonds. Kiev and the West have accused Russia of sending regular troops to eastern Ukraine to buttress the Russian-speaking insurgency while Moscow has repeatedly denied the claim.
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Russian President Vladimir Putin last week ordered his government to sue Ukraine if it defaults on the bond, after Moscow said that Kiev has rejected its offers of debt restructuring. Yanukovych fled the country in February 2014.
