Zelenskiy Signs Law On Suspending Ukraine's External Debt Payments

Ukrainian President Volodymyr Zelenskiy has signed a law allowing Kyiv to suspend its external debt payments until October 1. According to the database of the Ukrainian parliament, Zelenskiy signed the law on July 31. After Russia launched its ongoing invasion of Ukraine in February 2022, Kyiv agreed with its creditors to freeze payments of around $23 billion until August 1, 2024. The adoption of the law allowing Kyiv to postpone payments means that Ukraine will enter a short-term debt default that will last until private bondholders agree to postpone Ukraine's debt payments until 2027. That option has been supported by foreign governments. Such a deal would have less of an impact on Ukraine's long-term borrowing than if no agreement is reached.