Ukraine completes procedures to receive USD 1.7 bln from the IMF

Ukraine has completed the first review of the Extended Fund Facility (EFF) arrangement with the IMF, the Finance Ministry reported on July 22. As a result, top government officials have sent a revised letter of intent to the IMF that “leads to the possible appointment of the IMF board meeting” to decide on the second tranche under the EFF worth USD 1.7 bln, according to the MinFin release.

Alexander Paraschiy: This statement signals no open questions are left between the IMF and Ukraine on the way to the second tranche’s disbursement. Earlier, IMF officials claimed that for this to be approved, Ukraine also has to demonstrate that its public debt is sustainable, i.e. show some progress with the debt operation. The readiness of the IMF to approve the loan without a completed debt operation, in fact, allows Ukraine to postpone its completion for a while, meaning there is no need for MinFin to introduce a moratorium on debt repayment this week. That means the likelihood has significantly increased that the USD 120 mln coupon on the government Eurobond, due tomorrow, will be repaid smoothly.