Through Ukraine’s membership of international financial institutions, the NBU actively cooperates with the following institutions: the International Monetary Fund, the World Bank Group, the European Bank for Reconstruction and Development, the Black Sea Trade and Development Bank, and the European Investment Bank.
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Ukraine became a member of the IMF in 1992, as set forth in the Law of Ukraine On Ukraine's Accession to the International Monetary Fund, the International Bank for Reconstruction and Development, the International Finance Corporation, the International Development Association, and the Multilateral Investment Guarantee Agency No. 2402-XII, dated 3 June 1992.
The NBU’s Governor is the Governor for Ukraine for Ukraine of the International Monetary Fund (IMF). On behalf of Ukraine, the governor votes for draft resolutions of the IMF Board of Governors – the highest governing body of the institution – and takes part in the annual meetings of the IMF’s governing bodies. Ukraine’s finance minister is the deputy IMF Governor for Ukraine.
The main areas of Ukraine’s and the NBU’s cooperation with the IMF are as follows: cooperation related to the programs that support the balance of payments (the stand-by arrangement and the extended fund facility), annual consultations under Article IV of the Articles of the IMF Agreement, technical assistance, and other activities envisaged by Ukraine’s membership of the IMF.
Because of the russian invasion of Ukraine, Ukraine asked the IMF to allocate USD 1.4 billion in emergency financial aid to Ukraine under the Rapid Financing Instrument (RFI). The IMF Executive Board made a decision to that effect on 9 March 2022.
The RFI program aims to finance priority expenditures and to address the urgent needs of Ukraine’s balance of payments due to the ongoing war, which if left unmet would result in an immediate and serious economic disruption.
On 30 September 2022, the IMF Executive Board approved the extension of anti-crisis financing instruments (also known as the Food Shock Window) intended to give additional emergency aid to member countries that have urgent balance of payment needs because of the global food crisis. This extension allowed Ukraine to request a new USD 1.3 billion disbursement under the RFI, and on 7 October 2022, the IMF Executive Board approved a decision to allocate USD 1.3 billion.
To provide additional support to Ukraine and respond to requests of some IMF member countries (Canada, Poland, the Netherlands, and the regional group of Northern Baltic States), the IMF, on 8 April 2022, approved opening of a special IMF-Administered Account facilitating allocation of funds to support Ukraine. The IMF member countries, their institutions, and international and intergovernmental organizations can credit funds to the account.
Using said account, as of the end of Q1 2023, Ukraine has already received loans and grants in the amount of almost USD 4.5 billion from the following countries: Canada, Italy, Germany, Belgium and the Netherlands.
Despite the war, Ukraine has consistently emphasized its ability to continue implementing reforms and the need to launch a full-fledged program that will provide financing to Ukraine. On 8 December 2022, the IMF approved a four-month Program Monitoring with Board Involvement (PMB) for Ukraine. The successful fulfillment of liabilities under the PMB was meant to pave the way for launching a new program with the IMF: the Extended Fund Facility.
The Extended Fund Facility program was approved by the IMF Executive Board on 31 March 2023. It is designed to last for four years and resolve balance of payments problems and restore medium-term external sustainability, fiscal and debt sustainability, and medium-term external viability, while promoting long-term growth in the context of post-war reconstruction and process of Ukraine’s accession to the European Union.
The program envisions a two-phased approach:
The financing under the Extended Fund Facility program is about USD 15.6 billion (SDR 11.6 billion). The first tranche of USD 2.7 billion (SDR 2,011.83 million) was received on Ukraine’s SDR account on 31 March 2023. It was directed to replenish the general fund of the State Budget of Ukraine.
The World Bank Group is comprised of the following five institutions: the International Bank for Reconstruction and Development (IBRD), the International Finance Corporation (IFC), the International Development Association (IDA), the Multilateral Investment Guarantee Agency (MIGA), and the International Center for Settlement of Investment Disputes (ICSID).
These institutions aim to provide financial and technical assistance to emerging markets.
Among Ukraine’s international financial partners, the World Bank is the second most important after the IMF.
Ukraine’s finance minister is the World Bank governor for Ukraine, while Ukraine’s first deputy prime minister, who is also Ukraine’s minister of economy, is the World Bank deputy governor for Ukraine. The NBU is the depository bank.
Ukraine works together with the International Bank for Reconstruction and Development (IBRD), the International Finance Corporation (IFC), and the International Development Association (IDA).
The funds obtained from these organizations are used to provide financial and technical support to the state budget, implement institutional and structural reforms, and to prepare and implement long-term investment projects that are in line with the priority areas of Ukraine’s economic development.
The NBU, together with the Ukrainian government, works together with the IBRD and the IDA on systemic projects, under which financing is allocated for the support of the state budget and the implementation of investment projects in Ukraine in order to develop the financial sector.
In the wake of the russian invasion of Ukraine, the World Bank approved in March 2022 additional financing for the IBRD project Economic Recovery Development Policy Loan (ER DPL), which was prepared with participation of the NBU. Additional credit financing under the project, almost USD 490 million in guarantees from the Netherlands and Sweden, and USD 600 million in project-related support from Japan went towards financing the general fund of the state budget of Ukraine. In addition, more than USD 1.2 billion in grants from the World Bank's Trust Donor Fund was allocated for the co-financing of this project.
The total support package mobilized for Ukraine by the World Bank together with partners to resist russia’s military aggression amounts to over USD 23 billion, including USD 20 billion that had already been paid as of beginning of April 2023.
The EBRD is an international financial institution that aims to finance economic reform in Central and Eastern European countries to help these countries transition to a market economy.
Ukraine became an EBRD member in 1992. Ukraine’s finance minister is the EBRD governor for Ukraine, while the NBU’s governor is the EBRD deputy governor for Ukraine.
The EBRD is one of the largest investors in Ukraine, providing considerable support for economic reform in the country. The bank finances investment development projects in the private and public sectors, while also providing technical assistance.
In July 2015, the NBU, together with other regulators of the Ukrainian financial sector – the Ministry of Finance and the National Securities and Stock Market Commission – signed with the EBRD a memorandum of understanding on cooperation in developing local capital markets. The parties confirmed their desire to develop the capital market in Ukraine with support from the EBRD. Pursuant to this memorandum, the NBU and the EBRD are implementing a number of technical assistance projects.
In May 2020, the NBU and the EBRD entered into a UAH/USD swap agreement totaling up to USD 500 million. This agreement helped safeguard macrofinancial stability in Ukraine during the global coronavirus crisis, while also providing additional support for the real sector of the economy.
In the wake of the russian invasion of Ukraine, the EBRD Board of Directors in March 2022 approved an initial EUR 2 billion resilience package of measures to help Ukraine and countries affected by russia’s war against Ukraine. During 2022, within the limits of this package, the EBRD provided over EUR 1 billion and intends to increase this amount to EUR 3 billion by the end of 2023. It is mainly focused on the assistance to the real economy – support to the energy and food security, restoring the railway, infrastructure, and pharmaceutical industry.
With a view to enhancing the effectiveness of Ukraine’s cooperation with international financial institutions and speeding up the use of loan funds provided by the IFI projects that aim to finance Ukrainian economic development, including through the resumption of bank lending and the development of the financial sector, the NBU and the Ukrainian government work together with other international organizations, such as the European Investment Bank (EIB) (Ukraine is not a member of this organization) and the Black Sea Trade and Development Bank (BSTDB) (Ukraine joined this organization in 1997). Ukraine’s first deputy prime minister, who is also Ukraine’s minister of economy, is the Black Sea Trade and Development Bank governor for Ukraine, while an NBU representative is the Black Sea Trade and Development Bank deputy governor for Ukraine.
The financing provided by these organizations is used to fund investment projects in the public and private sectors of the Ukrainian economy.
