IMF still expects more progress from Ukraine for tranche allocation

The International Monetary Fund (IMF) remains in negotiations with Ukraine and expects more progress for the allocation of the second tranche under the Stand-By Arrangement.

At a traditional briefing in Washington on Thursday, IMF Spokesperson Gerry Rice said that the talks continue.

He recalled that among the main topics are the preservation of the independence of the National Bank and the continuation of the flexible exchange rate policy, medium-term fiscal stability, the fight against corruption and improvement of corporate governance.

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.

After the allocation of the first tranche, four revisions of the Stand-By Arrangement were planned: following the results of June, September and December of this year, as well as June 2021 – with the completion of these revisions, respectively, on September 1 and December 1 of this year and on May 15 and October 15 of the next one. The amount of the second and third tranches – $700 million, the third – $560 million and the final fourth – $980 million. It was assumed that the virtual mission for the first revision of the Stand-By Arrangement would work from July 13 to July 23, but this plan was breached.

The virtual mission on the first revision of the Stand-By Arrangement, which started from the end of 2020, ended in mid-February without recommending the allocation of the second tranche, and IMF Resident Representative in Ukraine Goesta Ljungman announced the need for additional discussions and more progress on the part of Ukraine.

According to Interfax-Ukraine, in particular, the adoption of the law on the High Council of Justice and the removal of IMF fears regarding interference with the work of the National Anti-Corruption Bureau of Ukraine (NABU) and the Specialized Anti-Corruption Prosecutor's Office (SAPO) remain among the problematic issues. For a positive result, it is also necessary to adopt new amendments to the law on the National Bank already submitted to the Verkhovna Rada, as well as greater clarity regarding budget plans for 2022 and the audit of the COVID-19 fund.

Finance Minister Serhiy Marchenko expects to receive the second tranche in September this year, and the Servant of the People party expects to adopt all the laws necessary for this in May.

Source: www.en.interfax.com.ua