NBU Urges Government Compromise With IMF

KIEV, Ukraine -- The National Bank of Ukraine urged the government Thursday to reach a compromise with the International Monetary Fund to unblock access to a $15.2 billion loan that may be needed if the economy continues to deteriorate. “We call on the government to resume negotiations with the IMF,” Ihor Prasolov, the head of the NBU Council, the central bank’s strategic policy body, said at a press conference. “The government has to find certain compromises.” “This is very important for our country,” he said. “This is the cheapest money we can get.” The comment resonates with recent concerns by former President Viktor Yushchenko, who said the failure to resume cooperation with the IMF may lead to Ukraine defaulting on foreign debts early next year. The comments also underscore a continued clash between the government and the NBU over the future cooperation with the IMF with the government being more reluctant to implement suggested reforms. Prime Minister Mykola Azarov repeatedly said Ukraine will not agree to hike natural gas prices or take other unpopular measures recommended by the IMF that may have negative impact on the economy. He said Ukraine can handle without the IMF lending. Prasolov said access to the loan may be needed if the world economy continues to deteriorate. “We cannot predict how the situation develops on world markets,” Prasolov said. “Just in case, we have to have a possibility to ask the IMF for the money.” Meanwhile, there were growing concerns over the world economy after demand for steel, Ukraine’s main exports, had continued to weaken, reducing hard currency earnings by Ukrainian companies. Azarov, concerned with the weakening steel exports, said the government will restrict imports of the commodity and boost demand for domestically produced steel. These concerns over the state of the world economy were shared by President Viktor Yanukovych on Thursday. He said the government must pay greater attention to fending off any external shocks. “During this difficult times, when economic crisis is raging in the world, it cannot avoid touching upon our country,” Yanukovych said. “Every time we look into these issues, we see that one cannot take a nap,” Yanukovych said. “We have to look and watch every day, what should we do.”