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Possible IMF loan for Ukraine

UNITED STATES, WASHINGTON (OBSERVATORY) — The International Monetary Fund and Kiev may agree on a loan worth about five billion dollars, Bloomberg said, citing sources.

According to the publication, the new financial assistance program will replace the existing stand-by program and will be a loan under the so-called extended financing mechanism.

Earlier, the new Prime Minister of Ukraine Alexey Goncharuk announced the start of the mission of the International Monetary Fund in Kiev.

IMF tranches

In 2014, the Ukrainian authorities agreed on a loan of $ 17.5 billion. The four-year IMF assistance program using the Extended Financing Facility (EFF) provided for the allocation of the amount in this amount.

However, by the end of the financing program, it became clear that the country would not be able to cope with the debt burden without continuing to work with the fund.

On December 18, the IMF Board of Governors decided to give Ukraine an additional concessional credit line of $ 3.9 billion as part of the 14-month SBA lending financial support program. The first 1.4 billion will be available immediately, the rest within the framework of six-month reviews of program execution.

To meet the requirements of the program, the Rada adopted the state budget for 2019 with a deficit of 2.3% of GDP, inflation of 7.4% and an economic growth of 3%.

The adoption of a balanced budget for 2019 is one of the conditions for continuing cooperation with the IMF. The Board of Directors of the World Bank also decided on December 18 to provide Ukraine with loan guarantees in the amount of $ 750 million.

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