Ukraine may receive USD 4 bln from IMF soon, MP says

Ukraine can count on IMF loan as soon as the
parliament adopts the IMF-required banking law (#2571-d)
in full, Danylo Hetmantsev, the head of the parliamentary finance committee,
told Radio NV on Mar. 31. Based on information from the IMF, Hetmantsev
estimates that the first IMF loan tranche could be as large as USD 4 bln. He
expects all the funds will be directed to finance the state budget.

He said that after the approval of banking law (the
so-called anti-Kolomoisky law) in the first reading on Mar. 30, MPs have seven
days to offer amendments for the second reading. “We are promised to get many
amendments. This could be another ‘land’,” he said, referring to the bill on the recently adopted farmland market law,
which drew 4,018 amendment proposals for the second reading in February. The
deliberate tactic by those MPs opposed overwhelmed the parliament’s work for
almost two months. He expects parliament will vote for the second reading of
the baking bill at the end of next week.

Alexander Paraschiy: This
possible amount of IMF support is encouraging after, initially, the first IMF
tranche under the EFF program was estimated by the government at just USD 0.6
bln. So parliament should strive to approve the second reading of the banking
law as soon as possible. If the IMF indeed provides USD 4 bln in the first EFF
tranche (or in some combination of the EFF tranche and other programs related
to the coronavirus response), Ukraine’s budget will accumulate enough funds to
smoothly repay all its external debt (USD 3.9 bln in principal due by the end
of 2020).

On top of that, Ukraine can automatically count on a
EUR 0.5 bln tranche from the E.U. under the MFA-IV program, and some funding
from the World Bank (about USD 1 bln). This would fully resolve Ukraine’s
liquidity issue for this year. As we wrote before, we see a high likelihood
that Ukraine will be able to adopt the remaining law, though the situation does
not look 100% certain.