Refusal to finance the International Monetary Fund (IMF) may force the Ukrainian government to reduce the state budget deficit, as well as weaken the hryvnia exchange rate, and lead to an increase in inflation, public debt service costs and a number of other negative consequences, deputy head of the National Bank of Ukraine (NBU) Dmytro Solohub said.
“Refusal to cooperate with the Fund will most likely lead to an increase in debt service costs, a reduction in the inflow of foreign investment, and pressure on the foreign exchange reserves of the National Bank,” Solohub wrote in a column for Economic Truth.
Thus, the government will have to reduce the budget deficit, the hryvnia exchange rate will weaken in order to neutralize the negative impact on the balance of payments, respectively, inflation will accelerate,” added the deputy head of the central bank.
