18:45 11 Nov 2023

Ukraine and IMF reach agreement for $900 mln tranche disbursement

Ukraine and the International Monetary Fund have revised the mechanism of extended financing for the second time. The IMF's executive board is expected to approve an agreement to disburse $900 million to Ukraine in the upcoming weeks.

The press service of the IMF reported this.

These funds will be transferred within the four-year program of expanded financing for Ukraine for 15.6 billion dollars.

The IMF noted that the program is being implemented according to plan "despite the tough situation."

"All quantitative performance criteria at the end of June and indicative targets at the end of September have been met. Most of the structural benchmarks have also been met, and some others have been met with some delay or are being met, which shows the continued commitment of the (Ukrainian) authorities to the overall reform agenda," the institution said.

The IMF also noted that despite the "devastating impact" of the war on the economy, Ukraine managed to maintain macroeconomic and financial stability "thanks to a balanced policy, as well as constant and timely external support."

In addition, it was indicated that the recent transition of the National Bank of Ukraine to manage exchange rate flexibility will strengthen the stability of the Ukrainian economy.

However, the institution also clarified that Ukraine maintains a problematic environment for public finances due to a high budget deficit.

"[Ukraine's] financial system remains stable, liquid, and highly secured thanks to large-scale emergency measures, but given the uncertainty associated with the war, continued vigilance is necessary," concluded the International Monetary Fund.

As reported, the mission of the International Monetary Fund welcomed the start of negotiations for Ukraine's accession to the European Union.

The IMF noted that although the war significantly impacted production capacity, Ukraine has great potential for growth after the war ends, depending on policy and reform choices and the availability of financial resources.

"Proper management of post-war reconstruction, combined with decisive reforms (in particular on public investment management, corporate governance, and business climate) in the context of EU accession, could stimulate the return of migrants and investment flows needed to lay a more sustainable basis for economic growth and aid in fulfilling broader tasks of the development of Ukraine," the foundation added.

The financial institution emphasized that IMF experts and representatives of the Ukrainian authorities had discussions within the framework of consultations, which focused on medium-term policies.

They are the ones who should lay the foundation for a durable, sustainable, and ecologically safe recovery and support Ukraine on its way to joining the EU.

For reference:

In July, Ukraine received another 890 million dollars from the IMF from the 15.6 billion program.

The IMF board approved the four-year program of expanded financing of directors in March. It is part of an even broader international support package of 115 billion dollars.

It should be noted that on October 4, the International Monetary Fund opened a permanent representative office in the capital, closed since the beginning of the full-scale war in Ukraine in 2022.

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