Kiev has made a $120-million coupon payment on its Eurobonds that was due on Friday, according to Ukraine's Deputy Finance Minister Artem Shevalev. The country would have faced technical default if it hadn’t repaid the debt.

The coupon payment was in question until the last moment. Ukrainian Finance Minister Natalie Jaresko admitted in June that default was probable this month, adding it won’t hit people in the street.

Kiev is trying to persuade foreign private creditors to make concessions to Ukraine and to restructure $23 billion of its $70 billion debt. Last week, Kiev said Ukraine and the special creditor committee headed by the US Franklin Templeton "made progress" on the issue during direct negotiations in Washington, which took place on July 15. The committee includes T. Rowe Price, TCW Group, BTG Pactual and Franklin Templeton investment funds.

READ MORE: European Commission unlocks first tranche of €1.8bn package to Kiev

On Wednesday, the European Commission transferred its first tranche of €600 million to Kiev as part of the third Macro-Financial Assistance package worth €1.8 billion. Another two similar tranches are expected later in 2015-2016, provided Ukraine makes structural and economic reforms.

The IMF board of directors will hold a meeting to discuss the Ukraine crisis on July 31, TASS reports.

In the second half of this year, Ukraine had to make payments on its external public debt worth about $5 billion at the current hryvnia/USD exchange rate, according to TASS.

READ MORE: Ukraine’s public debt to hit 95% of GDP by year end – National Bank

This month Kiev’s payments on foreign debt should amount to $257 million. Of this $98 million will be payments on official credits of $159 million - loans from international financial institutions.

The negotiations between Ukraine and the Franklin Templeton-led group of private international creditors are tough. Kiev wants a 40-percent haircut worth about $15 billion in order to make the debt sustainable. This is inadmissible to the lenders. So far, the parties have only agreed to swap part of Ukraine’s debt for GDP-linked bonds.

Ukraine’s economy is now in ruins. The country’s GDP is expected to shrink 9 percent this year, with annual inflation jumping to 46 percent, according to the IMF. Its debt will hit 95 percent of GDP this year, according to the National bank of Ukraine. FT expects even worse, saying Kiev’s debt will top 100 percent of GDP in 2015.