Ukraine should take further steps to reduce the country's growing need for foreign borrowing to continue receiving assistance from the International Monetary Fund, the IMF has said.
Ukraine has already received $10.5 billion under the Stand-By Arrangement with the IMF, which should fully cover the country's fiscal deficit. However, there are certain risks that the fiscal deficit might broaden, as well as risks of renewed foreign currency cash outflows and reduced FDI inflows. The Ukrainian authorities should make every effort to tackle these risks - using reserves buffers and additional policy adjustments if needed, according to the IMF's second review under the stand-by arrangement with Ukraine, which has been posted on the fund's Web site.
In November 2008, the IMF approved a stand-by program from Ukraine worth 11 billion SDR ($17.1 billion based on the forex rate at the start of August). To date, Ukraine has already received around $10.5 billion of this amount. Ukraine could still receive around $6 billion if it complies with IMF requirements. $3.8 billion of this will be transferred by the end of this year on the successful completion of the third review of the SBA.
The Ukrainian presidential secretariat has predicted Ukraine will face difficulties winning the disbursal of the next tranche of the International Monetary Fund's loan, as the country is not only failing to comply with the obligations it had undertaken, but is misinforming the fund about their implementation.
