IMF, Ukraine to finalize loan agreement in few days, Lagarde says

IMF Managing Director Christine Lagarde expressed her optimism on Jan. 19 that a new agreement that will enable Ukraine to receive the next loan tranche from the IMF will be agreed upon very soon. “I have every reason to believe that the last few technical details that need to be addressed in the next couple of days will be satisfactorily resolved. Hopefully by that time, we will have met all the requirements,” she said after a meeting with Ukrainian President Petro Poroshenko in Davos, as reported by the president’s press service. Poroshenko “expressed content with Ukraine fulfilling and meeting all the requirements of the third IMF memorandum,” the report said.

Recall, the third review of IMF’s External Funds Facility program with Ukraine was scheduled for November 2016, which should have resulted in the signing of an updated memorandum and provision of a fourth tranche worth USD 1.3 bln. However, in late November, the IMF mission concluded its visit to Ukraine with no positive result. Last week, the IMF spokesman said he was expecting that all the outstanding issues would be agreed upon “within weeks.”  

Alexander Paraschiy: Ukraine and the IMF should finalize their memorandum next week, which will allow the IMF board to approve the third review under the program in late January or early February. The key question that remains is what will be the size of the next tranche. The amount agreed upon in the previous memorandum was USD 1.3 bln, but given that Ukraine has not met all of its commitments, it could be less.