The IMF’s virtual Ukraine mission from November 11 to 22 has ended and Staff-Level Agreement (SLA) has been reached on Program Monitoring with Board Involvement (PMB).
The SLA will set in motion consideration by the IMF leadership for the approval of the PMB and a discussion at the Executive Board. Fulfillment by Ukraine of its obligations under this program will help pave the way to a new IMF program that will provide financing to Ukraine.
During the mission, a series of meetings took place between representatives of the National Bank of Ukraine (NBU), the Ministry of Finance, and other Ukrainian authorities. As a result of the talks, the parties have, among other things, identified priority areas of work that will allow Ukraine to maintain its macroeconomic and financial stability in the future.
It has been agreed that the NBU will update the Strategy of Ukrainian Financial Sector Development, which will include the banking system’s resilience assessment, the concept of recapitalization and resolution of nonperforming loans (NPLs), and the development of further plans to facilitate the financial sector’s uninterrupted operation.
The mission also considered the need to renew efforts to cement good corporate governance practices in state-owned companies and banks and ensure the independence of their supervisory boards.
In addition, the parties discussed fiscal policy measures, including ways to increase tax revenues, and steps to revitalize the domestic market for government borrowing. These steps will make it possible to avoid the need for the monetary financing of the state budget in 2023.
“We are grateful to our colleagues from the Fund for another constructive round of negotiations and for understanding that time is very much of the essence for Ukraine today. We continuously feel the IMF’s support, and I am convinced that we have a common position on our cooperation going forward. For my part, I confirm that we are ready to work under the new program and to meet the commitments that come with it in order to safeguard our country’s macrofinancial stability,” NBU Governor Andriy Pyshnyy emphasized.
The PMB itself does not provide funding, but its approval will help raise funds from other international donors in 2023.
The IMF has been supporting Ukraine since the full-scale invasion broke out. In March 2022, Ukraine received USD 1.4 billion in aid within the Rapid Financing Instrument (RFI). In October, the IMF provided USD 1.3 billion in additional assistance under the RFI’s food shock window to help countries survive the food crisis triggered by russia’s full-scale war against Ukraine.