IMF will be ready to support Ukraine after parliamentary vote, van Rooden says

The IMF will be ready to discuss how it will support Ukraine
once the new government is formed following the parliamentary elections, IMF
Mission Head to Ukraine Ron van Rooden said on May 28, as reported by the
president.gov.ua website. The IMF mission head offered his assurance in a
meeting at the Presidential Administration with President Volodymyr Zelenskiy,
Finance Minister Oksana Markarova and National Bank Head Yakiv Smoliy. Van
Rooden said he sees the early parliamentary elections in Ukraine as a new
opportunity to accelerate transformations in the country, the press service
said. “The IMF is always a reliable partner for Ukraine in the times we
need support, and Ukraine, from its side, will remain a partner that commits to
its obligations,” Zelenskiy said during the meeting.

At a press briefing the same day, Alex Danylyuk, the
former finance minister and newly appointed secretary of the National Security
and Defense Council, said the Ukrainian side has agreed with the IMF to prepare
a new program “that will give an additional push for the development of our
country.” Commenting on the suggestion of oligarch Ihor Kolomoisky
that Ukraine should default on its external debt, Danyliuk said the president
is unlikely to adhere to such suggestions. “There is the position of separate
businessmen,” he said. “The position of the state is different. The
state should protect the interest of its citizens.” He added his own view
that a default “a path to nowhere.”

Alexander Paraschiy: The comments
from Ukrainian and IMF officials are encouraging and are fully in line with our
view that: 1) Ukraine’s default is not being considered by the
Zelenskiy administration, 2) Ukraine will be able to get IMF support
as soon as the new Cabinet is in place, and 3) early parliamentary elections are a positive development for Ukraine.
All in all, we see a high likelihood of at least one IMF loan tranche for
Ukraine by the end of this year. We also see a high chance for the country to
get a new IMF program as soon as the existing one expires in early 2020. So
far, we see the new power brokers doing all their best to improve Ukraine’s
image among international financial partners.