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Robert Kirchner, Garry Poluschkin

Finally progress on the IMF programme

On 22 November, the IMF Executive Board approved the second disbursement of USD 700 m to Ukraine and an extension of the current Stand-By Arrangement (SBA) to June 2022. After 16 months without progress since signing the agreement and receiving the first tranche in June 2020, the first review was now successfully completed. Delayed reforms and setbacks on the independence of the National Bank (NBU), the governance of state-owned enterprises and the anticorruption agenda were the main reasons for the delayed review.

  • Ukraine
NL 158 | December 2021
Macroeconomic Analyses and Forecasting

The recent breakthrough was achieved because Ukraine adopted legislative amendments to the Law on the National Bank to strengthen its independence, restored the effectiveness of anti-corruption institutions and passed a prudent budget.

There are still USD 2.2 bn left under the extended programme, which are set to be disbursed in two more tranches, contingent on further important structural benchmark reforms. The IMF programme is important as an anchor for further reforms, a cheap source of financing and a key enabler for access to international financial markets as well as for lending by other IFIs. Therefore, first promises by Ukrainian decision makers to continue the cooperation with the IMF beyond the end of the current programme are important signs.

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