The International Monetary Fund (IMF) is sending a delegation to Ukraine to begin a new round of negotiations on providing more aid to the Ukrainian government. The mission will begin in Kyiv on Nov. 14, Gösta Ljungman, the IMF’s representative in Ukraine told the UkrInform news agency.
Ukrainian Finance Minister Oksana Markarova also confirmed the arrival of the IMF mission on her Facebook page.
Ron van Rooden, assistant director of the IMF’s European department, will head the mission, which will negotiate with the government regarding a new extended fund facility (EFF) worth $5-6 billion. Ukraine’s central bank and government expect to reach an agreement with the IMF by December and receive the first tranche of aid by the end of the year.
The IMF mission last visited Ukraine in September 2019 but left after failing to reach an agreement. The foundation was reportedly concerned that the administration of President Volodymyr Zelensky would reverse the 2016 nationalization of PrivatBank, which previously belonged to the president’s former business partner, oligarch Ihor Kolomoisky. The IMF actively supported Kyiv’s decision to take control of the insolvent bank.
The IMF’s return to Ukraine signals that, despite these concerns, the country has a strong chance to secure additional funding from the organization.
In October, Ukrainian Prime Minister Oleksiy Honcharuk expressed hope that during the next IMF mission, “serious progress will be achieved” and Ukraine would come close to signing “a new three-year program.”
The IMF signs EFF programs with countries that are “experiencing serious payments imbalances because of structural impediments” or “are characterized by slow growth and an inherently weak balance of payments position,” according to the IMF site. Loans provided through EFF programs are repaid in equal semiannual installments over the course of 4.5 to 10 years.
Ukraine has long relied on the IMF. In 2020, the country will spend about 40% of its state budget to repay sovereign debts with interest. In absolute terms, Kyiv will need to pay its lenders Hr 438 billion, or roughly $18 billion dollars.
