14:22 13.02.2021

IMF mission ends without making decision on stand-by program revision - head of IMF

3 min read
IMF mission ends without making decision on stand-by program revision - head of IMF

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.

"The discussion was productive; however, more progress is needed towards completing the first revision of the program. The discussions will continue," Ljungman said in a statement on Saturday.

Ljungman said that the mission worked from December 21 to 23 and from January 11 to February 12 and discussed with the representatives of the Ukrainian authorities the progress in the implementation of measures and reforms that are part of the government's action program supported by the stand-by agreement.

According to him, the discussions focused on strengthening the National Bank management; improving the legislative and regulatory framework for banking supervision and financial recovery; measures aimed at reducing the fiscal deficit in the medium term; legislative initiatives to restore and strengthen anti-corruption infrastructure and justice.

The discussions also touched upon events in the energy sector, the head of the office said.

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 revision of the stand-by program can visit Ukraine approximately in April-May.

On June 9, 2020, the IMF approved a new 18-month stand-by program for Ukraine for SDR3.6 billion (about $5 billion) with an immediate allocation of $2.1 billion of the first tranche.

According to informed sources of the Interfax-Ukraine agency, the stand-by program 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.

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