Ukraine Disputes Alfa-Bank Reason For Missed Payment

KIEV, Ukraine -- ZAO Alfa-Bank’s reason for missing a bond payment this week is “artificial” and may destabilize Ukraine’s currency market, according to the central bank.

Kiev-based Alfa, a unit of Russian billionaire Mikhail Fridman’s Alfa Group, said yesterday it didn’t make a $100 million bond payment due May 4 because of a lack of U.S. dollars supply in the Ukraine interbank market.

“This is an artificial reason to avoid scheduled payments and a dangerous precedent to destabilize Ukraine’s internal currency market,” Natsionalnyi Bank Ukrainy said today in a statement on its Web site.

Natalia Ilnytska, a spokeswoman for Alfa-Bank, said the lender declined to comment on the central bank statement.

The central bank imposed restrictions on foreign-currency trading last month to arrest a 40 percent slump in the hryvnia in the past year.

Policy makers banned trading currencies for future settlement and required banks seeking dollars and other currencies to prove the money is being used to repay loans that were converted into hryvnia when they were originally received.

Alfa-Bank is Ukraine’s ninth-biggest lender by assets as of April 1, according to central bank data.

Source: Bloomberg