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IMF Executive Board Approves First Review of Ukraine’s Stand-By Arrangement

IMF Executive Board Approves First Review of Ukraine’s Stand-By Arrangement

On 22 November 2021, the IMF Executive Board approved the first review of its stand-by program with Ukraine and supported a request to extend this arrangement through June 2022.

As a result of the review, the IMF will grant Ukraine another tranche of SDR 500 million (an equivalent of USD 699 million). The extension of the stand-by program will maintain the possibility for Ukraine to access additional SDR 1.6 billion (over USD 2 billion) in IMF tranches.

 “We are grateful to our IMF colleagues for their fruitful cooperation and the decision they have made. This is an important signal that the IMF supports the actions taken by the Ukrainian authorities and the NBU in particular. The program’s priority areas remain ensuring macroeconomic stability, overhauling the financial system, and implementing structural reforms,” NBU Governor Kyrylo Shevchenko emphasized.

Within the current cooperation framework between the IMF and Ukraine, the NBU is committed to continue work in several areas, including efforts to:

  • strengthen the central bank’s independence
  • pursue an inflation-targeting monetary policy
  • overhaul state-owned banks and further implement corporate governance reform
  • cut public spending on failed banks
  • reduce the banking system’s NPL ratio
  • strengthen the banking supervision system, the regulation of nonbank financial institutions, and more.
For reference

On 9 June 2020, the IMF Executive Board approved an 18-month stand-by arrangement to support Ukraine’s macroeconomic and financial stability. The program envisages SDR 3.6 billion (some USD 5 billion) in funding.

In 2020, Ukraine received the program’s first tranche of SDR 1.5 billion (roughly USD 2.1 billion).

Between 21 September and 18 October 2021, the IMF Mission worked to finalize its first review of the stand-by arrangement. These efforts resulted in the parties reaching a Staff-Level Agreement. This opened the way for the IMF Executive Board to consider completing the first revision of the current stand-by program and extending its implementation for Ukraine.

 

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