Speaking to journalists at a press briefing held as part of the Information Day on cooperation between the regulator and international financial institutions, Director of the NBU International Relations Department Serhii Kruhlyk said that Ukraine is currently receiving sizable financial assistance from international institutions that help our country implement structural reforms in all sectors of the economy and resume sustainable growth.
According to him, the International Monetary Fund (hereinafter – the IMF), the World Bank, the European Bank for Reconstruction and Development (hereinafter – the EBRD), and the European Investment Bank are the major financial donors to Ukraine.
"The IMF is currently Ukraine's key partner. In should be noted that the development of relations between our country and the IMF serves as an indicator for the international community, other financial institutions and foreign investors to gauge the economic situation and investment climate in the country," noted Serhii Kruhlyk.
Ukraine has been involved in cooperation with the IMF since 1992. The Government of Ukraine has entered into a four-year Extended Fund Facility (EFF) Program (hereinafter – the Program) with the IMF, which aims to advance comprehensive economic reforms to address structural imbalances and restore macroeconomic stability. The IMF-supported program amounts to the equivalent of USD 17.5 billion.
In March, Ukraine received the first tranche from the IMF in the amount of USD 5 billion. The first review of Ukraine's progress under the IMF's EFF is scheduled for May. The disbursement of the second tranche of USD 2.462 billion is scheduled for mid-June.
"Ukraine will receive fresh funds from the IMF only after a successful review of Ukraine's performance under the IMF's EFF and the progress it has made in meeting its commitments to undertake a broad range of reforms on all fronts, not only financial sector reforms, but also energy sector reforms, legal, structural and administrative reforms," said Serhii Kruhlyk.
According to him, the National Bank of Ukraine is on track with its commitments under the program and we have reasons to hope that the IMF's Executive Board will approve the second tranche of financial assistance for Ukraine.
"The program lays out in detail all the laws and regulations that need to be amended. The regulator is currently working on legislative initiatives related to the banking industry that must be passed by the Verkhovna Rada of Ukraine under the IMF's EFF. Efforts by the Parliament to enact these amendments are crucial to the successful review of Ukraine's performance under the program by an IMF mission team.
Serhii Kruhlyk also said that in line with the Decree of the President of Ukraine dated 19 December 2005, No. 1809/2005 On Ensuring Ukraine's Representation on the Boards of Governors of the International Monetary Fund and the World Bank, the Governor of the National Bank of Ukraine, by virtue of the position, is the Governor on behalf of Ukraine on the Board of Governors of the International Monetary Fund – the organization's highest body.
This said, Valeriia Gontareva will lead a Ukrainian delegation to Washington to participate in the Annual Meetings of the Boards of Governors of the IMF and the World Bank to be held on April 16-21, 2015. As part of this event, the Ukrainian delegation is to take part in the meetings of the Netherlands-led IMF and World Bank constituency whose member is Ukraine, and other important events and meetings where the global economic outlook and the macroeconomic situation in Ukraine will be discussed.
With regard to the cooperation between the regulator and other financial institutions, Director of the NBU International Relations Department Serhii Kruhlyk put an emphasis on the tremendous prospects that are opening up for our country now.
"Foreign investors are following with keen interest the reform process in our country and are willing to invest in the Ukrainian economy, including in its banking sector. The EBRD, the International Finance Company and other investors are currently holding talks over their plans to participate in equity of Ukrainian banks, both state-owned and commercial banks," he said.
Serhii Kruhlyk pointed out that such signals are very positive. They reflect the resumption of confidence in the domestic financial sector and send a clear signal to the international community about the possibility of following their example and making reliable investments in Ukraine. "It is a sign to potential investors that today is the right time to invest in Ukraine's economy," he added.
In addition, Director of the NBU International Relations Department Serhii Kruhlyk noted that the National Bank of Ukraine hopes to expand cooperation with international financial institutions, especially those in Europe. "There is a point in using European Directives as a guide, including those that apply to the financial sector, as Ukraine signed the Association Agreement with the European Union and aspires to become a fully-fledged EU member," he explained.