Kyiv expects next IMF tranche by end-2Q16

Ukraine anticipates finalizing negotiations with the IMF on the second review of its EFF program and receiving its next tranche by the end of the second quarter, Deputy PM and Economy Minister Stepan Kubiv said on April 19, according to Interfax-Ukraine. “We have a timeline for our actions that includes the approval of bills by the parliament,” he said.

So far Ukraine is “not insisting” on merging the next tranches from the IMF, Kubiv said. Ukraine was planning to receive from the IMF this year four tranches worth USD 0.6 bln each and two carryover tranches from 2015, worth USD 1.7 bln each. In some of the draft memoranda, Ukraine offered to merge some these six tranches to increase the probability of receiving them all this year.

Ukraine needs to approve 19 bills to secure the next IMF tranche of USD 1.7 bln and U.S. loan guarantees of USD 1.0 bln, said on April 19 Dmytro Shymkiv, the deputy head of the Presidential Administration. Of these 19 draft laws, 14 need to be improved or resubmitted by the new government, he said. Ukrainian President Petro Poroshenko, in his turn, said he hopes the needed bills will be on the parliament’s agenda already on Thursday.

Alexander Paraschiy: Last year, Ukraine was only able to receive two IMF tranches out of four planned. The delay in this initial plan has now reached more than six months. Based on this, we are discounting Kubiv’s expectations to get a new tranche by the end of June. A realistic schedule would be to gain the next tranche by the end of summer, and secure another IMF tranche by the year’s end. Thus far, Ukraine does not urgently need the IMF money as the nation’s current account balance has improved in line with the recovery in global steel prices. In any case, Poroshenko’s and Kubiv’s stated eagerness to continue IMF cooperation is positive and creates some hope for reforms.