Ukraine Plans Talks With The Creditors

        Ukraine will enter into negotiations with creditors to ensure the country can pay its debts, the country's finance ministry said on Wednesday.
        The finance ministry didn't explicitly say it will enter debt restructuring talks. But the move comes as private economists and debt-rating firms have said the war-torn country would need to rewrite terms of its debt to stay afloat.
        Earlier Wednesday, International Monetary Fund Managing Director Christine Lagarde said she would back a request by President Petro Poroshenko for an expanded international bailout.
        As part of the new financing package, the finance ministry said it "will consult with the holders of Ukrainian international sovereign debt so as to improve Ukraine's medium term sustainability."
        "The markets were expecting this step and should welcome it as it will provide the financial support Ukraine requires to jump-start its economic recovery while yielding acceptable outcomes for all of our stakeholders," Finance Minister Natalie Jaresko said.
        The ministry issued the statement from Davos, Switzerland, where Mr. Poroshenko and Ms. Lagarde met on the sidelines of the World Economic Forum.
        Economists have said for months that lenders, including Russia and private bondholders, would likely have to agree to extend the maturities on Ukraine's debt and lower the borrowing costs to prevent the country from defaulting on its debt obligations.
        The country faces $10 billion in foreign-currency debt servicing this year alone. The new cash is largely needed to help build the central bank's cash reserves to halt the hryvnia's free fall and to inject capital into the banking system to prevent bank runs.
        Write to Ian Talley at ian.talley@wsj.com and Matthieu Wirz at matthieu.wirz@wsj.com
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        (END) Dow Jones Newswires

        January 21, 2015 17:00 ET (22:00 GMT)

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