Ukraine plans to apply for emission financing to the National Bank of Ukraine (NBU) in 2023 only as a last resort, according to the Memorandum on Economic and Financial Policies of the IMF Program Monitoring with Board Involvement (PMB).

"If there are unexpected critical financing needs or delays in external disbursements, we will first apply market-based tools to borrow additional funds; we will request monetary financing from the NBU only as a last resort," the memo says.

"In 2023, assuming that external financing commitments are disbursed in a timely manner, domestic government securities are issued on the primary market at sufficient volumes, adequate revenues are mobilized to reduce fiscal financing needs, and no further shocks materialize, we would be in a position to eliminate our reliance on monetary financing by the NBU," it reads.

"Excessive monetary financing would entail large risks for price and external stability. The NBU, in agreement with the Ministry of Finance, determined that it would keep purchases of domestic government securities at about UAH 30 billion per month, or below UAH 400 billion in 2022, and we expect to stay within this limit. This will be monitored by a ceiling on general government borrowing from the NBU," it says.

"The availability of adequate external financing coupled with such measures to revive the domestic government bond market will support our goal of strictly limiting direct NBU financing of the state budget this year and eliminate it altogether in 2023," the report said.