Ukraine has announced a temporary suspension of its international debt payments starting August 1, as President Volodymyr Zelenskiy signed a law enabling this moratorium until October 1. This decision follows a preliminary agreement with major bondholders to restructure approximately $20 billion in debt, a necessity prompted by the ongoing economic strain from Russia's invasion. The proposed restructuring would include a 37% nominal haircut, potentially saving Ukraine $11.4 billion over the next three years. While a short-lived default is anticipated, it is expected to have a less severe impact on Ukraine's long-term borrowing prospects compared to a default without an agreement. Additionally, bondholders have until August 1 to approve the restructuring deal, which includes a 10-day grace period for a $34 million coupon payment on a Eurobond. The negotiations have reportedly faced challenges due to significant differences in the assessments of Ukraine's financial situation.