IMF green lights third USD 3.3 bln loan tranche for Ukraine

The board of the International Monetary Fund, at a meeting yesterday, cleared the disbursal of a third, USD 3.3 bln, tranche (of a total USD 16.4 bln facility) to Ukraine. The IMF also reportedly approved adjustments to the loan program, including a deeper budget deficit to acknowledge the difficulties of Naftogaz of Ukraine. IMF First Deputy Managing Director John Lipsky said that a key new component was Ukraine’s action to strengthen Naftogaz’ finances, including developing a schedule of natural gas price increases to bring domestic levels up to international market rates. Andrii Parkhomenko: We think that the majority of the funds will be directed into the state budget, as opposed to the first tranche (half of the second tranche was sent to the budget). This amount together with part of the previous tranche will cover the bulk of this year’s fiscal deficit.