International Monetary Fund confirms agreement with Ukraine on $15.6-billion loan

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Edited by |Alexander Yanxina
ECONOMY section
22 March 2023 - WASHINGTON

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The IMF expects the loan " to help mobilize large-scale concessional financing from Ukraine’s international donors and partners"
The International Monetary Fund (IMF) confirmed it had reached a staff-level agreement with Ukraine to provide a loan of $15.6 billion to the Kyiv government.

"The Ukrainian authorities and IMF staff have reached a staff-level agreement on a set of macroeconomic and financial policies that would be supported by a new 48-month Extended Fund Facility (EFF) Arrangement," the IMF said in a statement on Tuesday.

The loan amounts to 577% of Ukraine’s quota and "aims to support the Ukrainian authorities anchor policies that sustain fiscal, external, price and financial stability, and support the ongoing gradual economic recovery, while promoting long-term growth <…> and Ukraine’s path to EU accession."

The IMF expects the loan " to help mobilize large-scale concessional financing from Ukraine’s international donors and partners."

Last week, the IMF Board of Governors approved amendments to the organization’s statute, allowing the financial institution to approve loans for Ukraine and other countries "in conditions of extreme uncertainty."

Alexey Mozhin, Russian executive director at the International Monetary Fund (IMF) and dean of the organization's board of directors told TASS in an interview last week that Western countries were demanding that the IMF management provide Ukraine with a loan program by the end of this month. Mozhin recalled that "throughout its history, the IMF has never provided loans to a country in a state of the acute phase of the war."

The new rules "say a lot about guarantees of repayment from donors and creditors," namely the United States, Canada, and the European Union, the Russian envoy said. In his opinion, if such a loan program is approved, the fund "will provide direct funding for Ukraine's military spending."

He added that if the loan program is approved it would simply cover Kyiv’s current debts to the IMF. In the next three years - from 2023 to 2025 - Ukraine must pay almost $10 billion to the fund. "In the absence of refinancing, Ukraine will most likely be forced to default," the Russian official added.