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08 June 2023

US 'stands ready' to help Ukraine rebuild ailing economy


The United States offered Sunday to assist the Ukraine in rebuilding its battered economy following three months of devastating protests that have plunged the country into its worst crisis since independence.

Fears that Ukraine's debt-laden economy is facing default have sparked panic on markets, with bond yields rising sharply and the hryvnia currency losing a tenth of its value in the span of a few weeks.

US Treasury Secretary Jacob Lew met with Russian Finance Minister Anton Siluanov on the sidelines of the G20 meeting in Sydney after the Ukraine parliament voted Saturday to oust President Viktor Yanukovych, following a week of brutal violence in the capital Kiev.

Lew emphasised that the United States, working with other countries including Russia, "stands ready to assist Ukraine as it implements reforms to restore economic stability and seeks to return to a path of democracy and growth," a US Treasury official said.

The pair discussed the "unfolding situation" in Ukraine, and Lew noted "the need for stability and economic reform," the official said.

There is also uncertainty over whether Moscow will keep paying out a $15-billion bailout it promised to Kiev, with the latest tranche of Russian aid suspended pending a return to calm.

Standard & Poor's ratings agency predicted Friday that if Russia scrapped the bailout, Ukraine would default on the $13 billion of debt it is due to pay back this year.

At their meeting at the G20, Lew and Siluanov "agreed on the importance of promoting economic and financial stability in Ukraine, and the need to implement reforms that could be supported by an IMF programme".

US President Barack Obama held "constructive" talks Friday with Russian counterpart Vladimir Putin as he pressed for swift implementation of a deal to end Ukraine's deadly crackdown on protesters.

Putin and Obama agreed that the Ukraine agreement needed to be swiftly  implemented and that all sides should refrain from violence, as they also pressed for the need to stabilise the economy.

Washington had offered staunch support for protesters in Kiev, demanding political concessions from the Moscow-backed Ukraine government and warned of "consequences" if violence, which has killed about 100 people, did not stop.