The National Bank of Ukraine (NBU) expects that disbursements under the Extended Fund Facility (EFF) program with the International Monetary Fund (IMF) in 2018 will amount to US$2 billion.
"This year the NBU expects about $2 billion [in] tranches from the IMF, as well as the EU and the World Bank loans to be issued to the government," the NBU said.
Read alsoPoroshenko after talks with Lagarde: Ukraine confirms readiness to continue cooperation with IMF (Video)This will ensure an increase in the country's international reserves up to $20.5 billion (covering 3.7 months of future imports) by the end of 2018, Ukraine's central bank forecasts.
However, late in 2017, the regulator projected an increase in the international reserves in 2018 to $22.2 billion.
"In 2019-2020, due to spiking reimbursement of the external public debt, the deficit of overall balance of payments and a drop in international reserves is expected," it said.
The NBU originally expected two IMF tranches in 2018 to the tune of $3.5 billion.
"A lack of the structural reform essential to maintain macrofinancial stability and continue cooperation with the IMF poses the main risk to the implementation of the mentioned scenario," the regulator said.
"In case of premature termination of the IMF program, it may impede Ukraine's access to the international financial markets, which may bring higher currency depreciation and inflation expectations and raise probability of facing problems with external public debt servicing in the next years," the NBU added.
In 2018-2020, the government and the NBU have to pay more than $16 billion for external debt servicing. "Hence, the NBU deems further cooperation with the IMF within the existing and new programs to be critical for maintaining macrofinancial stability," the NBU said.
According to the NBU, another considerable risk stems from a looser fiscal policy of the government. In particular, faster growth in social spending than in labor productivity may aggravate the inflationary pressure. If this should be the case, the NBU will have to resort to creating tighter monetary conditions than in the baseline scenario.
