Ukraine imposes moratorium on repaying $3 billion Russian bond: PM

That involved a 20 percent write-down of bond holdings, which cut Ukraine’s sovereign debt from $19 billion to $15.5 billion.

Ukrainian Prime Minister Arseny Yatseniuk placed a moratorium on the loan payment, due to be paid Sunday.

The suspension would stay in place “until the acceptance of our restructuring proposals or the adoption of the relevant court decision”, Yatsenyuk said.

Russian Prime Minister Dmitry Medvedev has revealed he signed a decree on response sanctions against Ukraine following Kiev’s joining of anti-Russian sanctions.

“Russia has refused, despite our repeated attempts to sign the agreement for restructuring, to accept our proposals”, Yatsenyuk said.

The Kremlin on Friday slammed North Atlantic Treaty Organisation and Ukraine for misinterpreting a remark by President Vladimir Putin as a virtual admission of Russian troops in eastern Ukraine.

Crimea, which was annexed by Russian Federation early previous year, is suffering long blackouts after pylons that supplied the peninsula were blown up by unknown people in November.

“Since Ukraine has made the decision of implementation [of the Association Agreement], and there has been no special agreement reached [with Russia], these measures will expand to include Ukraine from January 1”, Medvedev said.

“We have expected these actions – looking at the line of conduct that the Ukrainian authorities have exercised in the last six months”, Storchak told journalists.

That effectively means that Ukraine is defaulting on the debt.

He said Ukraine had no chance of winning the ensuing court case.

“Ultimately, the problem of any lender is that he is interested in the economic growth of its borrower”, he said. “An out-of-court restructuring is possible, but the only way to negotiate is to negotiate directly”.

“But due to the statements from Ukrainian officials, they are not planning to do that”.

The fund meanwhile expressed concerns Friday over parliament’s rejection this week of a draft budget for next year and a new tax code, saying that a balanced budget is a “key condition” for funding and deviating from it would “inevitably disrupt the associated worldwide financing”.