NBU head expects no IMF tranche in 2020

Kyrylo Shevchenko, the governor of the National Bank of
Ukraine (NBU), listed three issues that are being currently discussed between
the IMF and the Ukrainian government, as reported by the Voice of America
website on Nov. 11. Those are decisions of the Constitutional Court (possibly
regarding the anti-corruption bureau headand electronic declarations), the 2021
draft state budget and the activity of the National Bank.

“If the ways to resolve the issues are being worked
out and we are moving ahead from both sides, then I am an optimist – Ukraine
has all the chances to host the IMF mission by the end of this year,”
Shevchenko said.

Alexander Paraschiy: This is a
sobering statement from the NBU head, which means that not only is an IMF
tranche unlikely (or impossible) in 2020, but it’s optimistic even to expect
this year an IMF mission to discuss the tranche. This is in line with our
base-case scenario of no IMF tranche in 2020, meaning IMF-related financing of
Ukraine’s 2020 budget deficit (from the fund, the EU and the World Bank) for a
total amount of up to USD 2.5 bln won’t arrive this year.

Therefore, the only viable way for Ukraine to try
to fill its budget gap without such money is a massive issue of international
Eurobonds. As soon as it becomes apparent to the government that no IMF-related
money will come soon, it will be high time for Ukraine to prepare for the new
bond issue.