AFP, Kiev :
Ukraine’s central bank on Tuesday poured more than half a billion dollars into the country’s largest bank after nationalising it in a bid to avert its collapse and a financial meltdown.
PrivatBank received 15 billion hryvnias ($558 million dollars / 546 million euros) in order to stay afloat while it undergoes major restructuring.
The central bank said the money would be used “to support (the bank’s) liquidity, ensure the uninterrupted servicing of clients, and the functioning of automated teller machines.”
The loan was issued at a 16 percent annual interest rate that must be repaid by the end of the year.
The lender was owned by Poroshenko’s political foe Igor Kolomoyskiy and his close business partner Gennadiy Bogolyubov.
The two billionaires were reportedly heavily burdened by debt because of dubious loans the bank made to their cronies.
Kiev’s decision falls in line with the International Monetary Fund’s demand for Ukraine to clean up and stabilise its murky financial sector and seek sustainable growth.
Both the IMF and the European Union welcomed the government’s action.
But the state takeover has created public unease about people’s holdings and whether the country might enter another economic crisis similar to when Russia annexed Ukraine’s Crimea peninsula in March 2014.
Ukraine’s central bank on Tuesday poured more than half a billion dollars into the country’s largest bank after nationalising it in a bid to avert its collapse and a financial meltdown.
PrivatBank received 15 billion hryvnias ($558 million dollars / 546 million euros) in order to stay afloat while it undergoes major restructuring.
The central bank said the money would be used “to support (the bank’s) liquidity, ensure the uninterrupted servicing of clients, and the functioning of automated teller machines.”
The loan was issued at a 16 percent annual interest rate that must be repaid by the end of the year.
The lender was owned by Poroshenko’s political foe Igor Kolomoyskiy and his close business partner Gennadiy Bogolyubov.
The two billionaires were reportedly heavily burdened by debt because of dubious loans the bank made to their cronies.
Kiev’s decision falls in line with the International Monetary Fund’s demand for Ukraine to clean up and stabilise its murky financial sector and seek sustainable growth.
Both the IMF and the European Union welcomed the government’s action.
But the state takeover has created public unease about people’s holdings and whether the country might enter another economic crisis similar to when Russia annexed Ukraine’s Crimea peninsula in March 2014.
