IMF to approve next wire for Ukraine in two-three weeks, MinFin says

Ukraine and the IMF are on the final stage of negotiations and an Executive Board meeting might be appointed within the next two-three weeks, Finance Minister Oleksandr Danylyuk reported on a local Ukrainian TV channel on Feb. 16, according to Ukrinform news agency. “I anticipate it [the IMF Executive Board meeting] might happen within next two-three weeks and after that it will take a few days to wire the next tranche to Ukraine”, Danylyuk said. 

The last wire of USD 1 bln was approved for Ukraine in September 2016. After that, the Ukrainian authorities failed to meet key structural benchmarks outlined in a Memorandum with the IMF (law on agro land circulation and strengthening the targeting of utility-related social assistance programs). The successful nationalization of Privatbank in December 2016 unlocked negotiations with the Fund, according to Ukrainian authorities.

Ukraine has received three tranches for about USD 7.6 bln from the IMF under the EFF program which started in March 2015. The amount of the upcoming fourth tranche is expected to be USD 1.0 – 1.3 bln.

Alexander Paraschiy: We have no doubts regarding the upcoming fourth wire from the IMF. Fund officials have publicly stated that only some technical details are remaining before the approval of the tranche. Against this backdrop, we can hardly question the timing estimates of the Minister of Finance.

What is much more interesting is that we will have an updated Memorandum with the Fund. The to-do list we saw in the September memorandum was quite challenging.  Which tasks will be selected for priority action will effectively give us a clear view of how realistic the next wire might be in the very near future.  In our opinion, negotiations around the steps to be completed for the fifth wire comprise the main reason for the delay at the moment.