IMF mission ends without making decision on Stand-By Arrangement review

The virtual mission of the International Monetary Fund (IMF) in Ukraine on the first revision of the program for Ukraine in stand-by format ended without a positive result on such a revision, head of the IMF office in Ukraine Goesta Ljungman declared the need for more progress and new discussions.

"During December 21-23 and January 11 to February 12, IMF staff held discussions with the Ukrainian authorities on progress in implementing the policies and reforms in the authorities’ program supported by the current Stand-By Arrangement. The discussions focused on strengthening governance of the National Bank; improvements to the legislative and regulatory framework for bank supervision and resolution; policies to reduce the medium term fiscal deficit; legislation restoring and strengthening the anti-corruption framework and the judiciary; and energy policy. The discussions were productive, but more progress is needed to support completion of the first review under the program. Discussions will continue," International Monetary Fund (IMF) Resident Representative in Ukraine Mr. Goesta Ljungman said today in Kyiv.

According to the Interfax-Ukraine agency, the adoption of law on the High Council of Justice and the removal of IMF concerns about interference in the work of NABU and SAPO are among the problematic issues. For a positive result, it is also necessary to adopt new amendments to the law on the National Bank and banks that have already been introduced to the Verkhovna Rada and refuse to limit prices introduced this winter on the energy market, as well as greater clarity regarding budget plans for 2022 and the audit of the COVID fund.

According to experts, if some of these issues are solved, the next mission for the first review of the stand-by arrangement can visit Ukraine approximately in April-May.

On June 9, 2020, the IMF approved a new 18-month stand-by arrangement for Ukraine for SDR 3.6 billion (about $5 billion) with an immediate allocation of $2.1 billion of the first tranche.

According to informed sources of Interfax-Ukraine, the stand-by arrangement was actually "paused" due to actions on the part of the Ukrainian side, which questioned the basic principles of cooperation under the program. However, the statements of President Volodymyr Zelensky on the commitment to reforms and the fight against corruption and a number of concrete steps, including the adoption of the 2021 state budget and the restoration of the organizational structure of the National Bank, made it possible to declare the mission.

Source: www.en.interfax.com.ua