IMF sanctions stand-by agreement worth $5 billion for Ukraine lasting 18 months

International Monetary Fund (IMF) has approved an 18-month standby agreement for Ukraine totalling US$5 billion. program will help country deal with ecomic strain due to coronavirus and will focus on local businesses, safeguarding financial stability, moving forward with key governance and anti-corruption measures.

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IMF loan sanctioned 

An initial amount of SDR 1.5 billion (about US$2.1 billion) has been sanctioned immediately, whereas rest of amount will be done later, over as many as four reviews. 

Executive Board also discussed ex-post evaluation of exceptional access under Ukraine’s 2015 extended arrangement under Extended Fund Facility (EFF), which concluded that extended arrangement helped restore macroecomic stability and growth but did t fully dress Ukraine’s underlying balance of payments vulnerabilities.

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Regarding standby agreement, Kristalina Georgieva, Managing Director and Chair said, " program will focus on safeguarding medium-term fiscal sustainability, preserving central bank independence and flexible exchange rate, and enhancing financial stability while recovering costs from bank resolutions."

" National Bank of Ukraine (NBU) has skillfully mand monetary policy during a very challenging period. Central Bank independence should be preserved, and monetary and exchange rate policies should continue to provide a stable anchor in context of inflation-targeting regime while allowing orderly exchange rate justment and preventing liquidity stress," she ded.

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IMF h previously approved a 14-month SBA in December 2018 totalling up to US$3.9 billion. country has been receiving a number of such funds fro IMF with one granted in 2015 as well.

SBA allows Fund to respond flexibly to countries’ external financing needs-and to support ir justment policies with short-term financing.

Earlier this year, Ukraine opted laws lifting ban on sale of farmland and preventing former owners of nationalized or liquidated banks from regaining ownership or receiving state compensation. Both were listed by IMF among conditions for providing aid to Ukraine last year.

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(With inputs from ncies)

(Im credits: AP)