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Kyiv says that even if negotiations with the International Monetary Fund go well, it's not expecting to receive cash from a new standby loan imminently. That has analysts speculating another big eurobond is on the way in a bid to buy more time.

The IMF mission, which arrived on January 29, is due to spend a month in Kyiv for what are anticipated to be very difficult talks. The government is already starting to manage expectations and playing down the chances of a happy end to the trip.

Economic Development and Trade Minister Ihor Prasolov said at a press conference on January 30: "It is not thought that right after the mission's work at the beginning of February we will immediately sign in Kyiv or travel there [to the United States] and sign a memorandum. The IMF mission's main task now is to study the situation in Ukraine."

Kyiv is hoping to negotiate a new standby agreement after a deal agreed in June 2010 was suspended after just nine months, and then expired in December last year. The previous deal was for SDR10bn ($15.4bn) but according to the National Bank of Ukraine, the country only succeeded in getting two tranches, worth a total of SDR 2.25bn ($3.4bn), before it was frozen. The proceeds of any new deal would be used to repay Kyiv's $5.5bn of foreign currency debt repayments due this year, including cash it owes to the IMF.

The main sticking point on a new deal is the government's continued refusal to increase the cost of gas to households until it renegotiates pricing on its gas imports with Russia. For it's part, Moscow has been happy to let Ukraine stew, as it wants to force it to join the Customs Union - its trade club with Belarus and Kazakhstan that came on line at the start of 2010.

In the last week Kyiv has suggested that it might increase domestic gas tariffs on the wealthy, but analysts say it's too little too late. Previously the IMF was soft on Ukraine, issuing the first two tranches of the 2010 programme on little more than a promise that the associated reforms would be made - only to see the government renege. Since then, the Washington-based lender has been a lot tougher and will likely demand proof of change before handing over any more money.

However, despite the government forecast that it will need to wait for any hard cash, even should it manage to persuade the IMF to agree a deal, yield-hungry markets were unperturbed.

"Gazprom slaps a $7bn bill on Ukraine, and disappointment on the IMF front, and zero market reaction - a sign of the liquid times we live in," says Tim Ash at Standard bank. "I guess the market and the Ukrainians are working on the assumption that they can come to market very soon and do a very big ticket eurobond which will buy them further time. Clearly the Yanukovych administration is still reluctant to do the difficult things the IMF wants just yet - the game plan is probably play for time, and seek to delay gas prices hikes on the population now until the heating season ends in April."