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IMF Mission Completes Its Work in Ukraine, Reaching Staff-Level Agreement

IMF Mission Completes Its Work in Ukraine, Reaching Staff-Level Agreement

The IMF mission, which started on 21 September, completed its work in Ukraine on 18 October 2021.

The IMF mission reached a staff-level agreement (SLA), which will be a basis for program review by the IMF Executive Board and making respective decision on the next disbursement under the Stand-By Arrangement. 

A series of fruitful meetings took place in the course of the mission that allowed, in particular, to prioritize further reforms in financial sector. They are primarily concerned with strengthening corporate governance at the NBU, further reform of the public banking sector, reducing government spending on failed banks, reducing NPLs, and improving supervision and regulation of nonbank financial sector.

Furthermore, the discussions focused on monetary policy under the inflation targeting regime, in particular the NBU's actions to bring inflation back to the 5% target and maintaining it at that level, as well as on phasing out the anti-crisis measures aimed at supporting liquidity of the banking system.

As part of the mission’s work, progress in meeting the conditions of the previous Memorandum of Economic and Financial Policies (MEFP) was reviewed. In particular, the parties discussed structural benchmarks, quantitative performance criteria, and indicative targets.

“As previously reported, the NBU has already met the two structural benchmarks it was designated to meet under the Memorandum. The first benchmark was to approve the NPL reduction plans of state-owned banks. The second benchmark concerned the passage of amendments to the Law of Ukraine On Banks and Banking to bring Ukrainian banking legislation closer to EU standards.

We’re grateful to our colleagues from the IMF for the fruitful, meaningful discussions and work. Reaching an agreement on the main areas of reform is a vital step for Ukraine. We’re committed to making further progress in the program by focusing our efforts on implementing the agreements reached,” said NBU Governor Kyrylo Shevchenko.

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