16:34 21.01.2016

Meeting with Poroshenko brings Ukraine, IMF closer to memorandum signing

2 min read
Meeting with Poroshenko brings Ukraine, IMF closer to memorandum signing

The Managing Director of the International Monetary Fund (IMF), Christine Lagarde, has expressed a favorable view about the prospect of giving Ukraine yet another IMF tranche.

Lagarde told reporters on Thursday after talks with Ukraine's President Petro Poroshenko in Davos that in her view it was a very positive discussion.

The IMF chief said she hopes the discussion will bring the parties closer to the signing of a memorandum and that this process will end successfully.

She said the meeting was productive, the talks focused on Ukraine's economic development and the approval of its 2016 budget.

The four-year Extended Fund Facility (EFF) program, which opened in March 2015 and totaled SDR12.348 billion (around $17.11 billion according to the current exchange rate), with the first tranche of $5 billion, initially involved quarterly reviews of the program, disbursing three SDR1.18 billion (around $1.63 billion) tranches in 2015, and reducing quarterly tranches in 2016-2018 to SDR0.44 billion ($0.61 billion).

Ukraine was able to get only the first two tranches, the first one was partly ($2.7 billion) used to support its national budget; the rest of the funds went to the traditional recipient, the National Bank.

According to Ukraine's Finance Minister Natalie Jaresko, before making a decision on whether to grant Kyiv yet another tranche the IMF will be assessing compliance with all pre-conditions and structural 'beacons' that were to have been met before the end of December 2015. If these conditions were fulfilled successfully, IMF directors could meet to discuss disbursement of a third EFF tranche in late January-February.

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