The International Monetary Fund (IMF) will give Ukraine $2.7 billion “free of charge and without any additional conditions” on Aug. 23, the Presidential Office reported after a phone call between Ukrainian President Volodymyr Zelensky and Kristalina Georgieva, managing director of the IMF.
The IMF board of governors distributed funds from its Special Drawing Rights (SDR), a supplementary international reserve that has allocated $650 billion for 190 member-nation countries to combat the effects of a pandemic around the world. The money does not have to be paid back.
“This is a historic decision – the largest SDR allocation in the history of the IMF and a shot in the arm for the global economy at a time of unprecedented crisis,” IMF Managing Director Kristalina Georgieva said.
This is the most large-scale IMF allocation since the global financial crisis of 2008-2009, meant to help nations cope with the economic fallout of the coronavirus pandemic. Considering it sank much of the world in recession in 2020 and raised costs for medical care, this money is much needed.
SDR allocation is based on a nation’s financial stake in the IMF. Since the United States is the largest shareholder, it will receive the biggest amount of SDR. Ukraine’s share amounts to 0.42 percent.
SDRs can be converted into money and spent according to a nation’s needs. Ukraine can use it to bolster its cash reserves, pay down debt or finance its budget.
“It will be a great gift for our country to the 30th anniversary of independence. These funds will help overcome the effects of the coronavirus crisis and stimulate our economy. I am grateful to the IMF and personally to Kristalina Georgieva for this decision, ” Zelensky said.
Separately, the IMF and Ukraine agreed on June 9, 2020 to a conditional $5 billion, 18-month loan agreement. But Ukraine hasn’t received any money since an initial $2.1 billion installment because it has not met its conditions for the credit.
Among the agreed-upon conditions are independence of the National Bank of Ukraine and anti-corruption agencies. Talks remain stalled following an IMF mission that left Kyiv on Feb. 12.
Nonetheless, according to Zelensky, Ukraine is working to complete the first revision of the current IMF program and expects an IMF mission in September.
