IMF ready to continue financing Ukraine if debt to Russia meets with criteria of new arrears policy

The International Monetary Fund (IMF) is ready to continue financing Ukraine if its liabilities to Russia meet with all three criteria of the revised Policy on Non-Toleration of Arrears to Official Creditors, Hugh Bredenkamp, Deputy Director of the Strategy and Policy Review Department, has said.

"If you take any country case, if all the conditions we've laid out in the policy are met, then the Board could decide to lend into arrears," he said.

As reported, on December 8, 2015, the IMF Board of Directors approved reforming the fund's Policy on Non-Toleration of Arrears to Official Creditors.

According to the document, in circumstances where an adequately representative agreement has not been reached through the Paris Club, the Fund would consider lending into arrears owed to an official bilateral creditor only in circumscribed circumstances where all the following criteria are satisfied: prompt financial support from the Fund is considered essential, and the member is pursuing appropriate policies; the debtor is making good faith efforts to reach agreement with the creditor on a contribution consistent with the parameters of the Fund-supported program—i.e., that the absence of an agreement is due to the unwillingness of the creditor to provide such a contribution; and the decision to provide financing despite the arrears would not have an undue negative effect on the fund’s ability to mobilize official financing packages in future cases.