KIEV (Reuters) - International Monetary Fund chief Christine Lagarde on Sunday praised Ukraine's economic progress and urged its creditors to take full advantage of a deal to restructure $18 billion of sovereign and quasi-sovereign debt.
Speaking in Kiev alongside Ukrainian President Petro Poroshenko, Lagarde said: "It is really up to all creditors to take advantage of (this) debt restructuring ... We believe it is a very good arrangement ... We doubt very much that anything better could have been obtained."
Heavily-indebted Ukraine agreed late last month with its largest group of creditors to a deal that includes a write-down of 20 percent of the principal owed, a small increase in the coupon on most of the bonds and a four-year extension of maturity for each bond.
Talks are going on to gain support from the other creditors.
But Russia says it will continue to demand full repayment of a $3 billion eurobond coming due in December because it considers this debt official, not commercial.
Asked at a joint news conference with Poroshenko about the bond, Lagarde said: "It is up to the (IMF) board to determine the characterisation of one bond or the other and I think it will be for the board to decide."
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She said she was extremely encouraged by Ukraine's economic progress but urged Kiev to continue the fight to end corruption.
Poroshenko said he expected the Fund to agree on a third tranche of financial aid for Ukraine in October under a four-year Extended Fund Facility (EFF) programme totalling $17.5 billion.
An initial slice of $5 billion was disbursed immediately after the programme was approved by the IMF in March 2015 and another tranche of $1.7 billion was issued in July.
(Reporting by Natalia Zinets; Writing By Richard Balmforth; Editing by Kevin Liffey)
