IMF to decide loan program for Ukraine on March 11

15:02, 10 March 2015
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The key creditor of Ukraine, the International Monetary Fund, has confirmed its previously announced plans to consider on March 11 a medium-term program of financial assistance for Ukraine, designed for four years, under the Enhanced Extended Fund Facility (EFF) and worth a total of $17.5 billion, the Web site of the IMF reported on Tuesday.

REUTERS

According to the plan of the IMF Board of Directors, on March 11 the fund will consider the Ukraine's application for the Enhanced Extended Fund Facility program and the termination of the current two-year Stand-by program.

As UNIAN reported earlier, Ukrainian Finance Minister Natalia Jaresko wrote on her Twitter account that the IMF had confirmed the meeting of the IMF Board of Directors on March 11.

"The first tranche that Ukraine may receive for the macroeconomic stabilization of the country will be a significant part of the total sum of $17.5 billion under the new program with the IMF," Jaresko wrote.

"We expect that the fund will bring certainty to the currency market," she added.

As UNIAN reported earlier, on February 12, the Ukrainian government approved a memorandum of cooperation with the International Monetary Fund on a medium-term program of financial assistance for Ukraine, designed for four years, under the Enhanced Extended Fund Facility (EFF) and worth a total of $17.5 billion.

The program provides a number of key reforms: effective decisions in economic management, fighting against corruption, bringing order in the energy sector, optimization and reduction of public expenditure, the increase of GDP spending on investment by 3%, the reduction of the number of government officials, the equity in pension reform, first of all the main task is to reduce or cancel the so-called special pensions.

In addition, the main task of the new program is to stabilize the banking system and the exchange rate, so that 2016 could be a year of stabilization and economic growth in Ukraine.

The IMF said that they were confident that the implementation of the reform program would be successful, because the government of Ukraine had shown its willingness to implement reforms, to raise tariffs, to restructure banks, to cut public spending and to carry out judicial and anti-corruption reforms.

In addition, according to IMF Managing Director Christine Lagarde, the reform program will open to Ukraine an access to a common package of financial assistance of up to $40 billion within the next four years.

It is expected that the new program of cooperation will be approved at a meeting of the IMF Board of Directors on March 11, and Ukraine will receive the first tranche within a few days after a positive decision of the Council or by the end of March.

The Ministry of Finance says that the first tranche can amount to 60% of total sum, or about $10 billion. The funds will be spent on the replenishment of the gold reserves of the National Bank of Ukraine and repayment of the country's foreign debts with all repayments.

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