“ Ukraine has to build the reputation of the country as a reliable place to do business. ”
The IMF announced that the Board meeting regarding Ukraine’s request for $3.9 bln Stand-by loan is scheduled for December (source – the IMF website). Such scheduling of the IMF Board meeting on Ukraine’s loan is in line with the board meeting of the World Bank.
According to the new Stand-by program the amount will be provided to Ukraine in the next 1.5 years and will replace the existing $17.5 bln Extended Fund Facility (EFF) program, which the IMF board will cancel. According to the EFF program (started in March 2015), Ukraine’s government received four loan tranches for total $8.6 bln.
On Dec.10 Ukraine’s Cabinet of Ministers approved a letter of intention to sign the IMF memorandum for the new Stand-by program. It happed after Ukraine’s Parliament on Nov. 23 approved the 2019 state budget with a deficit not exceeding 2.5% of GDP that meets the IMF recommendations. Other words, 2019 state budget approval became the key pre-condition for the new Stand-by program from IMF.
If nothing wrong happens in Ukraine’s political situation, the government could expect that both – the IMF and the World Bank - will make positive decisions on providing Ukraine with new loan tranches.
Therefore, we could expect that IMF loan about $1.4-1.5 bln, as well as a loan guaranteed by the World Bank $0.6-0.8 bln, will come to Ukraine before the Christmas. These loans are supposed to increase Ukraine’s gross reserves by almost $3 bln in December 2018. That could make Ukraine’s currency stronger as well as help to overcome the turbulent period of the presidential elections (planned for March 2019) – commented Igor Mazepa.
Copyright © 2018 Igor Mazepa