Ukraine and IMF negotiations back on track after reform bills

An April 15, 2020 photo of a sign outside the headquarters of the International Monetary Fund (IMF) in Washington, DC.Photo by AFP

Ukraine and the International Monetary Fund have reached a compromise on anti-corruption and corporate governance reforms, the Ministry of Finance reported on July 9.

Following recent talks between Minister of Finance Serhiy Marchenko and IMF representatives in Washington D.C., the fund acknowledged Ukraine’s progress in carrying out actions needed to continue cooperation, such as corporate governance reforms and ensuring the independence of the National Anti-Corruption Bureau.

The IMF also called on Ukrainian authorities to respond appropriately to the last year’s Constitutional Court of Ukraine decisions that led to a rollback of anti-corruption efforts in the country.

The compromise is a breakthrough in negotiations between the IMF and Ukraine, which were put on hold in February, when the Fund said that Ukraine failed to deliver on key reforms. Last month, Ukraine’s parliament approved a laundry list of reform bills required for IMF lending.

Both parties agreed to maintain close cooperation with the aim of reaching a Staff-Level Agreement in the nearest future. Earlier in April 2021 Marchenko had stated that the Agreement was to be reached within the following two months.

Since June 2020, Ukraine has been taking part in the IMF’s 18-month $5 billion stand-by arrangement. It received $2.1 billion of it as immediate disbursement and the remaining amount was to be disbursed in phases, pending successful reviews.

On July 7, 2021, Minister of Economy Oleksiy Lyubchenko stated that the Ukrainian government is expecting the next $700 million loan tranche this year.

Separately, the IMF executive board had approved a plan to issue $650 billion worth of reserve funds to its member-states as proposed by IMF’s Managing Director Kristalina Georgieva. The distribution of funds will be proportional to the IMF’s country quotas – Ukraine’s quota in the Fund consists of $2.89 billion under current exchange rates.

According to Alternative Executive Director at the IMF representing Ukraine, Vladyslav Rashkovan, Ukraine will receive $2.7 billion of the reserve funds.

“Overall, a very positive step from the IMF’s side, for others and for Ukraine, which will help the government use public funds in an orderly manner,” he wrote on his Facebook page.

(c)KYIV POST 2021

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