Ukraine reaches staff-level agreement with the IMF

The IMF mission to Ukrane announced on July 2 that it has completed its first review under the Extended Fund Facility (EFF). The IMF mission has reached understandings on most issues and staff-level agreements will be finalized over the upcoming days, its press release said.  The report will be subject to the approval of the IMF Executive Board. “The authorities’ commitment to the reform program remains strong. All performance criteria for end-March were met and all structural benchmarks due in the spring are on course to be met, albeit some with a delay,” said Nikolay Gueorguiev, the IMF mission chief to Ukraine.  Also the IMF hopes that Ukrainian authorities will complete the ongoing debt operation in line with program objectives in what should secure the sustainability of public debt, he said.

After executive board approval, Ukraine will receive a USD 1.67 bln second installment under the EEF agreement, according to the IMF memorandum.

Alexander Paraschiy: After top IMF officials explained that completing the debt restructuring is not critical for the second tranche, the IMF’s decision was quite predictable. Ukraine has implemented all the key requirements outlined in the memorandum and we do not expect surprises from the executive board.  Importantly, this decision gives the green light not only for a USD 1.67 bln installment but also for a EUR 0.6 bln loan from the EU and other Western partners. Against this backdrop, foreign currency inflow for Ukraine looks secured during the upcoming months in what should strengthen confidence in the prospects of the local currency, the hryvnia.