KIEV, April 4 – Ukraine could use some of its foreign exchange reserves to pay off some of its foreign debts ahead of schedule, Deputy Prime Minister Serhiy Tyhypko said Monday.

Ukraine’s state debts rose 2.9% on the month to $56.2 billion in February, while the country’s forex reserves increased 5.4% in the first quarter to $36.4 billion at the end of March, according to official statistics.

“When I was the governor of the NBU [in 2004] I had suggested repaying early credits of the International Monetary Fund,” Tyhypko said in an interview with ICTV late Monday. “Today, if we want to redeem the debts, we can use [foreign exchange reserves] to pay them off.”

The comment underscores a growing short-term confidence within the government that expanding economy has been increasing budget revenue, reducing the need to borrow.

But long-term prospects are less certain after the International Monetary Fund has last month postponed its $1.55 billion installment, citing delayed economic reforms.

Ukraine delayed until early June approval of pension reform legislation that is supposed to raise the retirement age, the key demand from the IMF.

The legislation, which was originally supposed to be approved earlier in March, has been delayed amid concerns at President Viktor Yanukovych’s administration that it may trigger social unrest.

The delay suggests that June or even July is the earliest when the IMF may be able to agree to release its $1.55 billion installment within $15.2 billion loan to Ukraine.

Ukraine’s consolidated budget revenue rose 28.4% on the year to 66.4 billion hryvnias in the first quarter, according to the State Treasury report.

Tax revenue rose 1% to 54.2 billion hryvnias in the first quarter, the Treasury reported.

The government forecast it will raise 281.5 billion hryvnias in budget revenue in 2011, while spending is projected at 321.9 billion hryvnias, according to the finance ministry.

The NBU purchased $255 million from the forex market in January and $250 million in February, increasing its reserves, but was forced to sell $7.4 million in March to support the local currency, the hryvnia.