Ukraine central bank anticipates next IMF wire in January

The successful Privatbank nationalization and approval of the 2017 state budget create the grounds for receiving the fourth wire from the IMF under Extended Fund Facility program (EFF) in January 2017, NBU Head Valeria Gontareva said on Dec. 22 in a local radio interview. “We are preparing” for the fourth wire, she said. “I assume we will get the next tranche in January.” 

Gontareva emphasized that Privatbank’s problems were outlined in detail in Ukraine’s September memorandum with the Fund. In regards to other structural commitments to the IMF like land reform and pension reform, they are delayed till the fifth wire.

In September, the IMF approved its third wire of USD 1 bln for Ukraine as part of its EFF program worth USD 17.5 billion. In October, the memorandum was made public, outlining a mid-November 2016 review and potential fourth wire of USD 1.3 bln. Overall, Ukraine might receive an additional USD 9.7 bln within the program by the end of 2018.

Alexander Paraschiy: The memorandum that Gontareva referred to does not openly declare the need for Privatbank’s nationalization but it’s implied between the lines. Regardless, the fact that authorities finally dared to take this step and completed the nationalization successfully creates a good chance that the Fund will approve the next wire for Ukraine very soon, disregarding the memorandum’s structural benchmarks being ignored so far. 

We do not see Ukraine in the IMF Executive Board schedule so far and the procedures for approval will probably take some time later than January. But we share the NBU’s optimism about the chances for receiving the next wire at the year’s start.