IMF ready to support reforms in Ukraine, spokesman says

The IMF issued a short and vague statement on Mar. 12
regarding the status of negotiations on a potential USD 5.5 bln loan program
that is desperately needed by the Ukrainian government. “We stand ready.
We are totally engaged to continue to support Ukraine’s reform efforts,” IMF
communications director Gerry Rice said in his reply to a question about a
possible program with Ukraine at his biweekly briefing. He also made clear that
the IMF has noticed statements from newly appointed ministers
indicating their goal of continuing close cooperation and advancing related
reforms.

Alexander Paraschiy: This was
the first comment about Ukraine from the IMF since last week’s cabinet
reshuffle. So the mood reflected in its statement is important, as we highlighted earlier this week.
Unfortunately, in our view, Rice’s comments do not look encouraging, meaning
that the IMF sees little so far beyond the publicly expressed intentions of the
Ukrainian government to reach a deal.

Yet at the same time, given the recent global markets
turmoil and rising pressure on the Ukrainian currency, the likelihood of a soon
Ukraine-IMF deal is growing in line with Ukraine’s growing risks. In light of
the government recognizing the dire consequences of no IMF deal, we see its
likelihood as having risen to above 50%.