The IMF Board has completed the third review of the Extended Fund Facility program. What it means for Ukraine: NBU explanation

On March 21, 2024, the Board of Directors of the International Monetary Fund approved the third review of the Extended Fund Facility program. The successful completion of the third revision of the program provides for the immediate allocation of an IMF tranche to Ukraine in the amount of about $ 880 million, which will be used to finance state budget expenditures. This was reported by the NBU, UNN reports.

Details

According to the NBU, these funds will also support Ukraine's international reserves, which will strengthen the NBU's ability to ensure exchange rate stability and maintain macrofinancial stability.

Another successful revision of the program is an important condition for Ukraine's access to a package of general financial support from international partners for the four-year period of the program in the amount of $122 billion.

AddendumAddendum

The IMF management noted that the Ukrainian authorities continue to fulfill their commitments under the EFF program and remain committed to an ambitious reform plan.

Ukraine has met all structural benchmarks and indicative targets, as well as all but one of the quantitative performance criteria (a slight failure to meet the lower tax revenue limit due to the blockade of the borders).

Separately, the Fund emphasized that despite the devastating impact of the war, the Ukrainian economy demonstrated remarkable resilience in 2023. Maintaining macroeconomic stability, ensuring fiscal and debt sustainability, creating the basis for reconstruction and the path to joining the European Union require further sustained momentum for reforms.

I am grateful to my IMF partners for their unwavering support of Ukraine and to my colleagues in the government for their joint steps towards reforms despite the high uncertainty and challenges of the war. We will continue to be committed to fulfilling our obligations, as we realize that this is in the best interest of Ukraine. Structural reforms will support the economy and macro-financial stability, which is important both in the context of a full-scale war and post-war reconstruction. The IMF's support will help to strengthen the trust of partners and attract the necessary financing

For reference

The decision of the IMF Board of Directors on the third review of the program was preceded by a Staff-Level Agreement reached on February 23, 2024.

As a reminder, on March 31, 2023, the Board of Executive Directors of the International Monetary Fund approved a four-year Extended Fund Facility program for Ukraine. The program includes measures to support fiscal, external, price and financial stability and economic recovery in a period of high uncertainty, as well as to improve corporate governance and strengthen state institutions with a view to post-war reconstruction and Ukraine's EU membership.

The EFF program is being implemented in two phases (wartime and post-war) and provides access to IMF loans in the amount of SDR 11.6 billion (equivalent to USD 15.6 billion). In 2023, Ukraine received three tranches from the IMF totaling SDR 3.3 billion (USD 4.5 billion). This year, Ukraine has the opportunity to receive four tranches from the IMF totaling SDR 4 billion (USD 5.4 billion equivalent), including the funding that is expected to arrive in the near future.

Ukraine will soon receive $880 million - Ministry of FinanceMar 22 2024, 12:06 AM • 33208 views