IMF APPROVED $ 5 BILLION COOPERATION PROGRAM WITH UKRAINE
11/06/2020
On June 10, the IMF Executive Board approved a Stand-By (SBA) program for Ukraine with funding equivalent to $ 5 billion. The approval of the program allows for the immediate allocation of the equivalent of $ 2.1 billion, according to a statement on the IMF website.
"The new program aims to help Ukraine to cope with COVID-19 pandemic challenges by providing balance of payments and budget support, while safeguarding achievements to date and advancing a small set of key structural reforms, to ensure that Ukraine is well-poised to return to growth when the crisis ends. Ukraine’s track record in stabilizing the economy over the last 5 years has been strong. However, more reforms efforts are needed to ensure robust and inclusive growth. The outbreak of the COVID-19 pandemic has significantly worsened the outlook and has refocused government policies on containment and stabilization" - the IMF said in a statement.
The approval of the SBA enables the immediate disbursement of the equivalent of SDR 1.5 billion (about US$2.1 billion). The remainder will be phased over four reviews.
Following the Executive Board’s discussion on Ukraine, Ms. Kristalina Georgieva, Managing Director and Chair, issued the following statement:
“Sound fiscal and monetary policies since the 2014–15 crisis have resulted in a sharp reduction in Ukraine’s external and internal imbalances. Public debt was put on a downward path, inflation has declined, and international reserves have recovered. As noted by the Ex-Post Evaluation of Exceptional Access under the 2015 Extended Facility, while growth resumed, reform implementation has been uneven and steadfast implementation of structural reforms will be needed to create a more dynamic and competitive economy. At present, the humanitarian and economic crisis stemming from the COVID-19 pandemic, has refocused policy priorities away from deep structural reforms".
It is expected that fiscal policies under the program will initially be directed at addressing the impact of the crisis in order to place public debt back on a downward path.
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