The Finance Ministry hopes to receive $5 billion from the IMF by 2021. During negotiations with the International Monetary Fund, Ukraine has presented its forecast for the national budget deficit in 2020 and agreed on the sum it can generate itself to cover it. Now the country hopes to receive additional $5 billion, Finance Minister Serhiy Marchenko has said. The money will go toward covering the budget deficit. For this agreement to happen, however, parliament still needs to pass several more laws on banks and amendments to the national budget.
The central bank buys almost $250 million at interbank this week. The National Bank of Ukraine (NBU) bought $248 million to smooth out excessive fluctuations in the national currency this week, according to NBU deputy head Oleg Churiy. For the first time since the beginning of quarantine, the NBU did not sell foreign currency. Churiy said that the demand for foreign currency decreased significantly and reached the level of the pre-quarantine period.
Last week, the NBU reduced interventions in support of the hryvnia on the interbank market to $77 million, while the regulator sold $980 million on March 10–13 and $1 billion on March 16–20, according to its data.
Ukrainian banks are introducing repayment holidays for their borrowers. About 10 local banks are working on rolling out repayment holidays for their clients, according to NBU deputy head Churiy. But more banks will do the same, he said. Borrowers will be able to postpone their main debt payments to the banks, but will still have to pay interest (some banks will temporarily postpone interest, too). Some debts will also be restructured.
Meanwhile, Ukraine has raised its forecast for inflation in 2020 to 11.6%. The Ukrainian government, in its updated macroeconomic report, raised the inflation forecast in 2020 from the previously approved 5.5% to 11.6%. The Cabinet of Ministers expects that the unemployment rate will be 9.4%, the average monthly wage of workers (gross) will be $380, while the nominal wage will decrease by 4.5%.
Ukraine’s prime minister has announced no additional restrictions on business amid new quarantine measures. “We did not and will not suspend commodity circulation, industrial enterprises and critical infrastructure,” Prime Minister Denys Shmygal said in a video statement on April 3. “All this works and will continue to work.” He also said that Ukraine simply can’t afford not to work for two to three months.
Prime Minister Shmygal also said a ban on going out without medical masks will start on April 6, a measure meant to prevent the spread of COVID-19. The government will also ban walking in a group of more than two persons (unless accompanying children) starting that same day. Walking in parks, squares, recreation areas, forest parks and coastal zones is also forbidden starting April 3. However, there are exceptions: a person can walk a pet alone in these areas. Also, the restrictions on movement and group size generally make an exception for activities required by one’s job. Finally, starting on April 3, people must carry identity documents with them at all times.
Shmygal said Ukraine could gradually loosen some quarantine restrictions if the number of COVID-19 cases decreases. In particular, he said one of the steps would be reopening public transportation to the broader public. This would “allow us to initiate the relaunch of the economy in the beginning of May,” he said.
This would not mean that all the restrictions would be lifted at once. Specifically, Shmygal said the quarantine would be prolonged for the elderly, students and schoolchildren.
