Today, on September 14, the Minister of Finance of Ukraine Sergii Marchenko signed the Memorandum of Understanding on the official debt service suspension with a group of official creditors of Ukraine from G7 countries and the Paris Club aimed at mitigating the economic impact of Russia’s war of aggression against Ukraine. The agreement follows the announcement made on July 20 by the group of official creditors of Ukraine of their intention to suspend principal and interest payments on bilateral debts from 1 August 2022 until the end of the year 2023, with the possibility to extend the suspension by an additional year.

The Participating Creditor Countries expressed their support for a debt service suspension to Ukraine to allow its Government to increase social, health or economic spending in response to the war.

The Memorandum was signed by the representatives of the Governments of Canada, France, Germany, Japan, the United Kingdom and the United States of America. The debt service suspension to Ukraine supported by these countries will allow the Ukrainian Government to save FX liquidity and thereby ensure social, health or economic spending in response to the war. The total debt stock covered by the Memorandum amounts to c. USD 3.1bn.

“The Russian war of aggression revealed Ukraine’s real friends. On behalf of our country and the Ukrainian people I would like to thank our partners for supporting us with concessional financing and grants and with this debt suspension initiative. Following the execution of this Memorandum, we will have bilateral negotiations with our partner countries. Together with our partner countries we will keep looking for solutions that will allow sufficient liquidity to be available to Ukraine to cover our monthly funding gap during the war, in the short term, deal with our financial commitmentsin the medium term and rebuild our economy as soon as the war ends.”, - said Sergii Marchenko, the Minister of Finance of Ukraine.

The Participating Creditor Countries welcomed the reforms implemented by the government of Ukraine to address the economic and financial consequences of the war. Also this group strongly encourages all other official bilateral creditors to swiftly reach agreement with Ukraine on a debt service suspension.